Footsie falls as blue-chip firms record losses

The FTSE 100 Index is down 36.9 points at 5152.8 after an hour's trading, having dipped by 50 points early on as a host of blue-chips slipped into the red.

Shares in British Airways fell by 3% or 6½p at 206p after it posted widening losses and said it still faced a number of considerable challenges.

Initial relief in the City that BA's third-quarter operating losses were not as bad as many analysts expected has given way to concern over future growth.

Peter Cogliatti, of Williams de Broe, says the London market has "run out of steam" after talk of economic recovery boosted stocks last week.

Mr Cogliatti says: "We are stuck in this 5000 to 5400 range, and I can't see where we are going to break out of it.

"It needs some bad news to come out or, hopefully, better news on the economy to inspire confidence and drive the market up again."

Joining BA on the way down is engineering group Invensys, off 4p at 112p.

Cable & Wireless is the heaviest faller, off 11p at 258½p, after weekend press reports of tougher trading conditions.

Other telecoms on the slide include Vodafone, down 2p at 152¼p; mmO2, off 3¼p at 232¾p; and BT Group, down 10½p at 232¾p.

But ICI is up 1½p to 325½p after it posted its final results. Plans for a rights issue, although at a heavy discount to its share price, are being well received as the company attacks its €4.7bn debt mountain.