Weaker dollar hits FTSE

A further weakening in the dollar left the London market in downbeat mode today as companies with a strong presence in the United States suffered.

By mid-morning, the FTSE 100 Index stood 22.8 points lower at 4725.1 as last week’s worse-than-expected jobs data from the United States also continued to take its toll.

The disappointing jobs figures had left the Dow Jones Industrial Average just marginally higher than its opening mark on Friday.

In London, BAE Systems was the heaviest blue-chip faller as investors failed to warm to its prediction of a “modest” improvement in its performance in 2005. Shares fell 4% or 10.75p to 246.5p.

Heavyweight drugs companies were also in the red as the US dollar continued to weaken against sterling. AstraZeneca slipped 28p to 2062p while rival GlaxoSmithKline fell 13p to 1132p.

Only a handful of companies managed to make it into positive territory, led by aerospace and defence group Smiths. The stock lifted 2%, up 14p to 780.5p, after confirming it is to snap up California-based medical device company Medex in a $925m (£476m / €688.5m) deal.

Telecoms group mmO2 also managed to move into the black after revealing trials of “super fast” 3G technology will start next summer. The stock lifted a penny to 120p. But rival Vodafone moved in the opposite direction, down 0.25p to 145.5p.

Outside the top flight, debt-laden support services group Jarvis plunged 9% after warning it faces a bleak future unless it completes a financial restructuring over the next month. Shares were a penny lower at 9.75p.

Construction group Mowlem weakened 6% – off 11p to 182p – as it warned full-year profits would be at the lower end of expectations after tough trading forced it to write down the value of some contracts.