Footsie dips as telecoms stocks weaken

The Footsie has closed down 22.5 points at 5050.8 as telecom stocks took a battering.

Energis fell another 25% to just 3p, with Vodafone, down 2½p at 129¼p, Cable & Wireless, off 7p at 207p, and mmO2 down 2p at 61¾p.

Tech shares were also on the slide, with Sage off 12p at 198p, Logica down 11½p at 403½p and Arm Holdings 13½p lower at 264p.

But the real damage was seen among FTSE 250 telecoms as investors reacted to yesterday's warning from Energis that it expected to breach banking covenants.

The pain was being felt by a clutch of other telecoms stocks, including Marconi, which fell 14% - 2¾p to 16¾p.

Colt Telecom also slid 16%, or 7p, to 37p, while Telewest Communications fell 1¾p to 17p and equipment group Spirent dipped a penny to 130½p.

National Grid, which owns around one-third of Energis, also suffered as shares fell 10½p to 451¾p.

Safer havens such as retailing were proving attractive to investors as Tesco gained 7½p to 253½p, Safeway rose 4p at 324p and Marks & Spencer lifted 2½p to 375p.

And Alliance & Leicester managed a rise of 14p to 845p despite unveiling a 11% slide in profits because of higher investment in its business.

Go-Ahead dipped after reporting a slide in half-year operating profits and saying the downturn in aviation services and weakening rail usage would affect profits for the remainder of the financial year.

Shares fell 37½p to 550p while National Express was off 15½p at 532p and FirstGroup dipped 12p to 250p.

And Express Dairies lost 30% - off 7¼p at 16½p - after disclosing that it was no longer in talks to be taken over.

Shares in restaurant group Fish! were also under pressure - down 5½p at 72p - after the company warned it would adopt a prudent approach to expansion.