Brown announcement has little affect on Footsie

Chancellor Gordon Brown’s long-awaited statement on euro entry drew little response from City investors today.

The FTSE 100 Index was already in negative territory prior to the announcement because of a turbulent session for Wall Street markets on Friday.

At one stage, the Footsie was almost 50 points lower but pulled back slightly to close 21.7 points lower at 4129.1.

The reaction on the currency markets was more marked with the pound sharply weaker following a morning Treasury report which put the ideal rate for sterling to enter the single currency at a higher than expected level.

But the main focus on the stock market proved to be New York after the Dow Jones Industrial Average lost hold of an initial 174 point gain on Friday.

The US market also opened on the back foot today, with investors reacting in particular to a profits warning from Motorola.

That further affected telecoms stocks in London following the impact on shares of a price cutting move announced by 3 owner Hutchison last week,

Vodafone slipped 1.75p to 126.75p, while rival mmO2 shed 0.75p to stand at 58.5p after losing 5% of its value on Friday.

With few major corporate announcements, most of London’s biggest movements took place outside the top flight.

However, aerospace group BAE Systems led the blue chip risers, climbing 4% or 6p to reach 154p on the back of further merger speculation.

Reports over the weekend said that BAE had turned down an informal merger proposal from French-based rival Thales. BAE is also thought to be interested in a tie-up with a major US operator such as Boeing.

Outside the FTSE 100 Index, security products group Chubb surged 7% or 4.5p to 68p after a report over the weekend said US group UTC was poised to announce a £620 million takeover.

And property group Canary Wharf gained another 5% or 12p to reach 275p, as investment bank Morgan Stanley confirmed that it had approached the company over a possible takeover.

The rise came on top of a 46% rise on Friday after the group said it had received a number of approaches.

But news of a fresh disposal was not enough to stem further falls for battered advertising group Cordiant after a report said rival WPP was set to launch a takeover bid which would hand shareholders just 3p per share.

Investors were clearly alarmed as Cordiant slipped another 1.75p to 5.25p – a 25% fall.

Heading in the opposite direction was technology management group Medical Marketing International after it announced a joint venture to develop a potential breakthrough treatment for HIV.

Shares more than doubled, rising 7.62p to 14.37p.

The biggest Footsie risers were BAE Systems up 6p at 154p, Exel ahead 18p at 658p, BT Group up 4.75p at 194p, and GKN ahead 3.75p at 226.75p.

The biggest fallers were Schroders NV down 32p at 616p, Capita Group off 8.5p at 245.5p, Compass Group down 11.25p at 351.5p, and Hilton Group off 5.75p at 181.25p.