Footsie continues downward slide

London’s benchmark FTSE 100 Index remained in the red today as fresh concerns about the state of the UK’s economy took the shine off a buoyant media sector.

Official data showed a surprise decline in manufacturing output during August, pushing the blue chip index lower despite strong gains for media shares following the Government’s statement on the planned merger between Granada and Carlton.

By lunchtime, top flight shares had shed 18.6 points to 4251.5 following an initial slide caused by a slow overnight session on Wall Street.

Later in the session attention is expected to focus on the United States, where aluminium producer Alcoa kicks off the third-quarter earnings season this afternoon.

With few earnings warnings in the run-up to the reporting season, analysts are forecasting a good quarter.

Closer to home, shares in ITV companies dominated risers boards following the Government’s conditional approval of a £4 billion merger that effectively creates a single ITV network.

Granada headed the Footsie risers with a 5%, or 5.25p, gain to 108.25p, while Carlton was among the second tier climbers, gaining 16.5p to 198p.

But rivals were also making strong gains after calls for a “package of measures” to protect smaller ITV operators.

Carlton’s gain’s were outstripped by SMG, which owns Grampian and Scottish Television, as it soared 10% or 9.5p to top the FTSE 250 risers board at 107p. And Ulster Television also put on 9.5p at 355.5p.

The other high profile mover was Manchester United which climbed more than 4% on top of a sharp rise yesterday after satellite TV group BSkyB revealed that it had sold its stake in the team.

The company later announced that investment vehicle Cubic Expression had build up a 23.15% stake. Shares were up 10p to 245p. But BSkyB itself was down 15p at 623.5p.

Elsewhere, clothing retailers Matalan and Marks & Spencer provided the main corporate earnings news in London.

Matalan put on 17.25p to 237.25p after showing signs of a sales recovery despite a 23% half-year profits fall to £41.2 million.

But M&S was prominent on the Footsie fallers list, weakening 8p to 307.75p, as it reported a tough summer with like-for-like sales remaining little changed on a year earlier.

Aerospace and defence shares were also among the Footsie risers after Swiss banking group UBS upgraded its targets on Rolls-Royce and BAE Systems.

Rolls rose 1p gain to 172.5p, while BAE lifted a penny to 181p.

But fellow industry player Smiths Group, which yesterday said it had won a £300 million contract to supply technology for the UK’s next generation F-35 Joint Strike Fighter jet, fell 3.5p to 696p.