Telecoms and bank shares depress market

Falls in banking and telecom stocks have pushed the FTSE 100 Index down 26.2 points at 5163.5.

Concern about the health of many blue chips continued to circle, with fears the rights issue launched by chemicals and paints group ICI could be the precursor to a wave of similar cash calls.

And losses on Wall Street on Friday, where the Dow Jones Industrial Average entered the weekend 12.74 points lower at 9907.26, also weighed on the market.

Vodafone is down 2%, off 3¼p at 151p and mmO2 is a penny lighter at 76¾p.

Cable & Wireless has fallen 4%, off 11¼p at 258¼p on fears the group could issue another profits warning.

Tech shares trading lower include Arm Holdings, down 3¼p at 309¼p while Logica was down 19½p at 518½p.

Of the banks, Barclays is 13p lower at £22.17, Lloyds TSB is off 6½p at 738½p and Royal Bank of Scotland is down 35p at £17.92.

Standard Chartered has slipped 11p to 769p while Northern Rock is off 13p at 675½p.

British Airways' shares have had a volatile morning, but are now up a marginal 1½p at 214p.

ICI has also had a volatile day, with shares initially falling but by lunchtime, they had gained 3% to stand up 8¾p at 332¾p.

Among smaller stocks, Hornby is ahead 11% or 28½p to 287½p after upping profit expectations for its financial year.

But RM saw its market value crumble after warning profits this year would be "less than half" the level seen last year. Its shares have plummeted 144p to just 81p, a drop of 64%.