Footsie continues slide

Worries over economic prospects on both sides of the Atlantic sent London shares lower for a second successive session today.

Worries over economic prospects on both sides of the Atlantic sent London shares lower for a second successive session today.

The FTSE 100 Index closed down 28.8 points at 3870.2 after GDP growth figures in the UK and United States disappointed.

The first quarter figure for the US, which showed weaker-than-expected year-on-year growth of 1.6%, hurt New York markets and impacted on the Footsie after it had managed a resilient morning session.

Economic confidence had earlier been dented by the UK’s growth estimate, with the quarter-on-quarter rate of 0.2% lower than most City hopes.

Media stocks did little to improve the mood after Pearson and WPP issued gloomy revenues updates.

Financial Times publisher Pearson led the Footsie fallers for a time after shareholders at its annual general meeting were told of a “significant deterioration” in advertising revenues in the year to date.

Shares closed 14.5p lower at 539p, although advertising giant WPP remained in positive territory despite reporting that revenues had fallen by 4% in the first quarter of 2003.

Investors drew encouragement from a forecast by boss Sir Martin Sorrell that the ad recovery will begin next year as shares lifted 6.5p to 430p.

But the biggest Footsie riser was electrical retailer Dixons after analysts considered that a Competition Commission hearing into extended warranties had gone well for retailers. Shares shot up 11%, or 11p to 111p.

FTSE 100 newcomer InterContinental Hotels also shook off the impact of yesterday’s second quarter profits warning to gain 9p at 349p.

But oil companies continued their falls from yesterday following news from Vienna that oil cartel OPEC had agreed to cut crude oil supplies by two million barrels a day in an attempt to stop prices falling.

BP was down 11p at 395p while Shell lost 12p to 375.5p. Both companies are due to update investors with first quarter results next week.

The drought of news from major companies meant investors’ eyes shifted to the second tier FTSE 250 Index.

Media company Chrysalis was riding high with a 7% gain, or 13.5p to 203p, after announcing it was in talks to sell its television division to a group led by former Granada chief executive Steve Morrison.

But the UK’s biggest estate agency group Countrywide Assured tumbled 6% or 6p to 94p after warning shareholders that profits would be lower than last year due to difficult market conditions.

It was joined on the way down by telecoms group Colt – off 7% or 3.5p at 44p - as the euphoria following yesterday’s first quarter results wore off.

Elsewhere, late-night bars operator Po Na Na saw its shares dive 48%, or 3.75p to 4p, after announcing it may be forced to sell more under-performing venues as it seeks to restructure its finances.

The biggest Footsie risers were Dixons up 11p at 111p, InterContinental Hotels ahead 9p at 349p, Alliance UniChem up 10.25p at 456.25p and GlaxoSmithKline ahead 26p at 1253p.

The biggest fallers were 3i Group down 22p at 436.75p, Hilton Group off 5.75p at 141.5p, AMVESCAP down 13.5p at 336.5p and Prudential off 14p at 354.75p.


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