Weak dollar sends FTSE sliding

Top flight shares headed southwards today in the face of a weakening dollar, higher factory gate prices and profit taking.

The FTSE 100 Index almost doubled earlier losses in late trading to close 23.2 points off at 4716.6 – its first fall after five positive sessions.

Concern about the potential impact of the softening greenback on US dollar-denominated profits in the coming weeks was weighing on a number of Footsie stocks.

The fastest rise in the cost of goods leaving UK factories for nine years stoked fears of inflationary pressure among traders.

Investors also saw a chance to bank some cash after the Footsie’s fifth day in a row of gains on Friday and a similarly positive performance on Wall Street.

After finishing last week nearly 73 points ahead – its third consecutive positive close – the Dow Jones Industrial Average was trading 17 points down shortly after the end of trading in London.

In London, telecoms group BT was one of the heaviest fallers after unveiling plans for a landmark acquisition costing $1bn.

News of its plan to buy California-based telecoms service provider Infonet Services failed to cheer investors, with concerns over the company’s expansion strategy forcing shares down nearly 1%, or 1.75p lower at 190.5p.

Other phone companies also lost out, with Vodafone off 3p to 139.25p and mmO2 down 0.5p at 105.5p.

Shares in British Airways also took a tumble after the airline unveiled half-year profits of £335m (€479m).

The stock was off 5.5p at 219p amid continued concern about fuel costs and pricing pressures.

Shares in FTSE 250-listed low-cost rival easyJet gained height, lifting more than 1% or 2.5p to 179p while Ryanair, saw its shares move nearly 5%, or 0.24c ahead, to €5.11.

Imperial Tobacco recovered earlier losses to end the day in positive territory after reporting a 13% rise in group underlying profits. Shares put on 8p to 1279p.

One of the heaviest fallers was B&Q owner Kingfisher, which lost more than 2% - off 7.75p to 303p – after broker Merrill Lynch downgraded the stock.

But Marks & Spencer improved on earlier losses to finish 3p higher at 352.75p ahead of tomorrow’s half-year results.

The day’s biggest beneficiaries were AB Foods, up 12p to 714p, Bunzl adding 6.25p to 448.25p, Sainsbury gaining 2.5p to 267p and British Land strengthening 7p to 778.5p.

Largest losers were Shire Pharmaceuticals, down 14.25p to 507.75p, Kingfisher losing 7.75p to 303p, Compass Group off 6p at 236.75p and British Airways falling 5.5p to 219p.