FTSE continues to drop

The FTSE 100 Index has picked up where it left off last week by adding to Friday's 60 point fall.

Despite optimism among traders for a positive start to the week, the Footsie stood 35.3 points lower at 4221.7 after an hour's trading.

The main downward factor appeared to come from New York, where both the Dow Jones Industrial Average and tech-laden Nasdaq finished in negative territory.

In London, investors arrived back at work with a feast of weekend press speculation to digest, particularly in relation to the Safeway takeover saga.

With William Morrison expected to be the only company to get the green light from the Competition Commission inquiry into four of the bids, shares in the Bradford-based company rose 3p to 219.75p.

Safeway also stood 1.5p higher at 298.75p, but Tesco eased 3p to 239.5p and Sainsbury's slipped 4p to 289.25p.

Outside the top flight, EMI confirmed speculation that it was in talks with Time Warner over a possible to deal to buy Warner Music Group.

But with any acquisition likely to involve the dilution of EMI shares through the offer of stock to Time Warner, the FTSE 250 Index company fell 2.5p to 155.75p, a drop of almost 2%.