Footsie back in negative territory

The FTSE 100 Index was staring at its 12th consecutive fall today as it tumbled back to earth after an early 60 point surge.

Traders were left biting their nails yet again as jitters about the Iraqi situation and the world economy continued to dominate in the City.

By lunchtime, the Footsie was struggling to hold onto its starting point and was 8.5 points below yesterday’s seven-year low at 3472.3.

The rest of the session is certain to depend on trading on Wall Street, where nerves are likely ahead of President George W Bush’s State of the Nation speech tonight.

Analysts said they would not be surprised if the Dow Jones Industrial Average rallied, and helped the Footsie to close around 40 points ahead.

David Buik at spread betting firm Cantor added however there was simply not enough to encourage investors into the market this morning.

He said: “If anyone knows where the good news is, if it’s hiding under a stone, then tell me, because sentiment out there is awful.”

In the City, it was the turn of telecom stocks to take a hit with mobile phone firm Vodafone off 1.25p at 109.75p, mmO2 down 1.75p at 47.5p and BT off 8.75p at 169.25p.

Elsewhere banks remained weak with HSBC off 1.5p at 643p, HBOS down 1.5p at 562p and Alliance & Leicester easing 7.5p at 677.5p.

Supermarket chain Safeway was another faller despite Philip Green’s confirmation he was seeking clearance from the Office of Fair Trading to make a cash bid.

The group fell 9p to 311p, a fall of almost 3%, while Morrisons was off 2p at 166p, taking the value of its agreed bid for Safeway down to £2.3 billion.

And insurers were suffering yet again with Aviva down 3.25p at 363.25p, Prudential off 3.75p at 356.75p and Legal & General down 1.25p at 75.5p.

The exception was Friends Provident which posted a 0.75p gain to 88p after posting 2002 new business figures at the higher end of expectations.

Among second-tier stocks, two former Footsie favourites experienced contrasting fortunes with ARM Holdings rising 0.5p to 46p after maintaining that revenues over the coming quarters were likely to be flat.

But 40,000 investors in Hull had a disappointing day as former stock market darling Kingston Communications slid 16%, down 10p at 54p, after warning underlying earnings would come in at the low end of expectations.