London shares end lower

Leading shares ended the day sharply lower, after data showing a surprise contraction of the US manufacturing sector acted to wipe out the gains amongst technology and telecom issues that had earlier pushed the FTSE 100 index to three-month highs, dealers said.

Leading shares ended the day sharply lower, after data showing a surprise contraction of the US manufacturing sector acted to wipe out the gains amongst technology and telecom issues that had earlier pushed the FTSE 100 index to three-month highs, dealers said.

The FTSE 100 closed down 15.9 points at 4,154.3, well off its midafternoon peak of 4,218.6.

This closing level was just above its session low of 4,149.8, registered in the last half-hour of trade.

The wider indices had also turned negative, with the FTSE All-Share down 4.96 points to 1,998.01 and the FTSE 350 lower by 5.7 to 2,044.7.

But positive broker comment saw the technology-heavy FTSE 250 maintain a gain of 15.8 points to 4,574.0.

Volume was average, with 2.5 billion shares having changed hands in 158,704 deals.

Meanwhile, the DJIA was lower by 13.64 points to 8,882.59 and the Nasdaq composite was up 15.70 to 1,494.50 - off peaks of 9,043.37 and 1,521.19 respectively.

Wall Street's slump came after the Institute for Supply Management said economic activity in the US manufacturing sector declined for the third consecutive month.

Its index of manufacturing business conditions read 49.2 in November - below forecasts of a rise to over the 50-point mark that divides between expansion and contraction.

Earlier, markets on both sides of the Atlantic had been boosted by broker upgrades, with Lehman Brothers hiking its rating for US chip making giant Intel, and Merrill Lynch raising its stance on Nokia.

Telecoms stocks were leading London's risers, with more speculation of management changes also aiding Cable & Wireless.

According to reports, the firm has been sounding out former BOC boss Richard Giordano as a replacement for chairman-elect David Nash who resigned last week, according to reports. C&W shares closed up 5-1/4 pence to 87-1/4.

Mobile operators were steadied by Merrill Lynch raising its global handset forecasts to above consensus levels, with the US broker predicting a boost from upgrades as the latest range of colour screen phones are launched.

Vodafone ended higher by 1-3/4 to 123-3/4, and mmO2 gained 1-3/4 to 52-3/4.

Among the fallers, broker downgrades weighed against the oil and media sectors.

Morgan Stanley lowered its rating on the oils to 'cautious' from 'in-line', while Deutsche Bank downgraded its ratings on both Pearson and Reuters.

Chip designer ARM Holdings boosted the midcaps after a Merrill Lynch upgrade.

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