FTSE recovery grinds to a halt

Drugs giant GlaxoSmithKline gave investors a headache today as the London market’s recent resurgence ground to a halt.

The FTSE 100 Index shed 112 points to end the day hanging on above the 4,000 barrier at 4006.9 as heavyweight stocks slipped back.

And Glaxo rose towards the top of the fallers’ board after disappointing with third-quarter results at the low end of expectations.

The group dropped more than 6%, or 84p to £12.87, despite unveiling plans to extend its share buy-back programme.

Glaxo was in good company, however, with a swathe of heavyweights losing ground as investors cashed in on recent gains.

The Footsie had climbed almost 10% since the start of the month but traders said the market now needed a fresh impetus.

Martin Dobson, head dealer at NatWest Stockbrokers, said there was still a great deal of uncertainty about the economic climate.

He said: “A lot of US companies hit targets in the third quarter but the way the economy is going the next lot may be harder to achieve.”

Alongside Glaxo, AstraZeneca lost 31p to end the day at £22.94 ahead of its own third-quarter results tomorrow morning.

Elsewhere banks were hit hard with Barclays off almost 7%, or 32p to 435p, HSBC down 5.5p at 715p and Royal Bank of Scotland off 105p at £14.60.

Insurers continued to suffer from concerns about the health of the sector with Royal & Sun Alliance losing 11%, or 12.75p to 103p.

And oil giants BP and Shell dipped as the threat of military strikes on Iraq eased on talk of renewed diplomatic efforts for a solution.

BP fell 7.5p to 420p, while Shell dropped 11.25p to 400.5p – its lowest close for over a week.

Of those blue-chips making progress, property group Canary Wharf towered above the rest with a 5% gain.

The group jumped 20p to 382p after bringing forward plans to a bumper £375 million shareholder payout through a special dividend.

But supermarket chain Safeway was continuing to struggle after yesterday’s second quarter update, slipping 4%, or 9p to 205p.

The group insisted it was on course to hit half-year targets but showed like-for-likes sales growth had slowed to 1.1%.

Among smaller stocks discount clothing retailer Matalan fell 6p to 189p despite an early surge after strong half-year figures.

The group posted a 9% jump in profits to £53.6 million but fears about the clothing market hit the stock later.

And transport giant Stagecoach plunged 44% after warning its US operations were continuing to suffer from the country’s weak economic climate.

Shares dived 10.75p to 13.75p as the group warned profits at Coach USA would now be at least £20 million below target in the year to April 2003.

In the FTSE 100, the highest risers were Canary Wharf, up 20p at 382p, Corus, up 2p at 44p, Severn Trent, ahead 19.5p at 659.5p and British Land, up 12.5p at 461.5p.

The heaviest fallers were Royal & Sun Alliance, down 12.75p at 103p, Amvescap, off 31p at 330.5p, Friends Provident, off 11p at 122.5p and Aviva, down 39.5p at 454.5p.