Footsie slides again

The London market is being pulled down by falls in banks and telecoms stocks.

By lunchtime the FTSE 100 Index was down 43.8 points at 4713.

The performance suggests that yesterday's bounce-back was what traders call a "dead cat bounce" - a recovery without any foundation.

The benign inflation picture raised the possibility that the Bank of England could afford to delay an increase in interest rates.

Despite this, banks slid lower, led by Abbey National which continued to fall in the aftermath of its shock profits warning last week. Shares slid 34½p to 798½p.

HBOS fell 25p at 727p, Lloyds TSB was 13p lower at 649½p and Barclays fell 12p to 543p.

Technology stocks were weaker across Europe, and in London, computer services group Logica slid 5p at 200p, while among the telecoms, Vodafone was off 3%, down 2½p at 93¾p, and mmO2 fell 1¼p to 38½p.

However, oil stocks were gaining, with BP helped by broker upgrade, up 6p at 546p. Shell was ahead 4p at 495p.

They were joined on the Footsie risers board by British Airways after it announced it was cutting the price of European air fares on 42 routes by up to 80%. Shares rose 3½p to 200p.

Outside the main index, telecommunications company Telewest fell 17%, or 0.55p, to 2.60p, as a debt-for-equity swap appeared more likely.