Slow day for London market

Investors shied away from the London market today with trading volumes remaining low on the back of continued war fears and economic worries.

The benchmark FTSE 100 Index closed the session down 25.3 points at 3701.8, as traders reacted to a fall on Wall Street where the Dow Jones Industrial Average had slumped more than 100 points by the time London closed.

London’s leading shares shrugged off a promising start and an upbeat day of trading on Friday to fall back into negative territory.

Martin Dobson, head dealer at NatWest Stockbrokers, said: “The outlook remains cautious.

“The overhang of the Iraqi situation is still playing on everyone’s minds. The Footsie is probably going to be down tomorrow again as the Dow looks like losing ground overnight.

“I cannot see the market having much of a rally in the current circumstances.”

Among those heading lower in London was engineering group Invensys, which continued to come under pressure following its profits warning earlier this month.

The group’s latest shares slide came after credit agency Moody’s put a negative outlook on its credit rating.

Shares in Invensys fell another 11%, down 1.75p to 14.5p, to top the Footsie fallers board.

The slide puts the group in danger of being relegated from the blue chip index in the next reshuffle.

Shares in defence group BAE Systems continued to fluctuate after last week’s announcement of a £750m hit to cover project overruns. Shares were today down 5p at 116.5p on a broker downgrade.

Advertising giant WPP was another stock heading south, off 3.5p at 399p, after it warned that 2003 would be a difficult year for the company. It expects a trading revival the following year.

Insurers also put pressure on the market, with Royal & Sun Alliance off 6.25p at 78.25p on downbeat broker remarks.

However, bucking the downward trend was mining giant BHP Billiton, which rose 5%, up 14.25p at 330p, after half-year profits met market hopes.

And while leisure group Six Continents gained 6.5p to 631.5p in early trading, forecasts of a sharp rise on the back of speculation of a bidding war failed to come true and the group ended the day at its opening price of 625p.

Internet bank Egg was under pressure despite announcing a narrowing of full-year losses. Shares tumbled 8%, or 9.5p lower at 104p.

Other banking stocks suffered too. Barclays was down 0.75p at 376p, Lloyds TSB lost 1.75p at 392.25p, and Bank of Ireland lost 0.25p at 10p after announcing 350 jobs would go when it merges two independent financial advice businesses.

Topping the FTSE risers board were BHP Billiton up 14.25p at 330p, Granada up 1.25p at 57p, EMAP up 13.5p at 735p, Severn Trent up 13p at 736.5p, and Legal & General up 1p at 74.25p.

Leading the fallers were Invensys down 1.75p at 14.5p, Royal & Sun Alliance down 6.25p at 78.25p, Hays down 4.5p at 76.75p, BAE Systems down 5p at 116.5p, and ICI down 6p at 157p.