London market off to slow start

A sharp fall in Cairn Energy’s share price set the tone for a lacklustre start to trading in London today.

A sharp fall in Cairn Energy’s share price set the tone for a lacklustre start to trading in London today.

The oil and gas group slumped 25% following a disappointing appraisal on a potential extension to its development site in north west India.

It contributed to the FTSE 100 Index falling 9 points to 4726.0 by mid-morning, during an otherwise quiet morning.

There was little in the way of inspiration from the US market, where the Dow Jones Industrial Average rose just 14 points last night.

Cairn, which fell 343p to 1015p, was also hit by a negative ruling from the Indian Government on future tax liabilities at the site.

It was followed on the way down by pharmaceuticals giant AstraZeneca – off 7%, or 143p to 1913p, after saying two key drugs had faced setbacks. Rival GlaxoSmithKline also lost 10p to 1186p.

Outside the top flight, housebuilders lost some of the hefty gains secured yesterday following speculation of a cash return to shareholders. Barratt Developments led the fallers with a drop of 39.5p to 569p, while Bellway lost 47p to 795.5p, Persimmon fell 29p to 671p, George Wimpey slipped 16.25p to 404.75p and Wilson Bowden eased 59p to 1101p.

Rail and bus operator Arriva also went into reverse – falling 5.75p to 511.5p, despite offering a positive view on its prospects for growth next year.

The group said each of its divisions had traded in line with, or ahead of, expectations since it announced its half-year results in September.

In contrast, engineering group IMI moved 1.5p higher to 378.5p after saying it was confident of continued progress in 2005 despite caution about the economic outlook.

And civil engineering group Balfour Beatty lifted half a penny to 305.25p after winning part of a contract worth up to £400 million to manage and maintain roads in the south west of England.

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