London market brought back down to earth

The FTSE 100 Index is down 16.5 at 4599.1 after an hour's trading.

This represents something of a recovery, as the index dropped more than 40 points in the first 15 minutes.

The London market has been brought back down to earth today after 144 points were added to the blue-chip index on Friday.

Analysts blame a bout of profit-taking as investors look to cash in on Thursday and Friday's gains.

Shares in Diageo are down 31½p to 776½p. Chief executive Paul Walsh has said the company's objectives have been met for the financial year, but its trading statement also details the pressure on sales volumes caused by the Latin American economic crisis.

Kingfisher is up ¼p at 310¼p after winning a decisive round in its £3.3bn (€5.1bn) battle for control of French DIY chain Castorama. Independent bank Rothschild has ruled that its 67 euros-per-share offer is fair.

Outside the Footsie, set-top box manufacturer Pace Micro has seen its share price fall by 16% or 8p to 41p after reporting full-year figures and issuing a downbeat forecasts of its short-term prospects.

But the market appears to welcome the appointment of former England manager Terry Venables as Leeds United's new manager, with shares up 11% or ¾p to 7½p.