Footsie slides heavily in early trading

Investors received a jolt today after the FTSE 100 Index fell heavily in early trading.

The Footsie, which rose to new 15 month highs last week, slipped 42.2 points to 4354.8 in the first hour of business after reacting to heavy falls for the Dow Jones Industrial Average on Friday and the Nikkei overnight.

Telecoms stocks added to the downbeat mood after mobile phone group mmO2 warned investors that it faced a challenging second half of its financial year.

That offset encouragement offered by the company’s first ever pre-tax profit, as shares fell more than 2% or 1.75p to 66.75p. Vodafone, which reports interim results tomorrow, also shed 1.5p to 125.75p.

There was positive news from Imperial Tobacco after the cigarettes giant posted a 40% rise in pre-tax profits and said it had boosted its UK market share to the highest for two decades.

Energy pair Scottish Power and Scottish & Southern Energy were also in positive territory after announcing plans to terminate the combined Peterhead and Hydro agreements, which have been in place since privatisation of the Scottish electricity industry in 1991.