Footsie falls back from high

A batch of gloomy updates took its toll on London shares today and forced the FTSE 100 Index to retreat from its recent 30-month high.

Fears that the Footsie may have risen too far contributed to its 13.4 point fall to 4840.7, with investors anxious not to be caught out by any sell-off.

The cautious stance came despite a brighter picture in New York, where the Dow Jones Industrial Average was 23 points higher by the end of trading in London.

Standard Chartered was the heaviest Footsie faller – down 3% or 24.5p at 928.5p – after the emerging markets bank said it would buy South Korea’s eighth-largest bank.

The share price weakness reflected the £1bn share placing that Standard said would take place in order to meet the price tag of 3.3 billion US dollars placed on Korea First Bank.

Elsewhere in the banking sector, Barclays rose 1% or 6.5p at 603.5p after a newspaper report linked it to a possible merger with American rival Wells Fargo.

The developments in banking helped divert attention away from the retail sector as firms awaited December sales figures from the British Retail Consortium tomorrow morning.

Updates from William Hill, Taylor Woodrow and Northern Foods did little for the overall mood after all three guided profits expectations lower.

William Hill put investors on standby for figures towards the bottom of the City’s range after punters enjoyed a run of success, particularly involving the results of Premiership teams Chelsea and Manchester United.

Despite the gloomy forecast, the market took the update in its stride with William Hill recovering from a poor start to stand 15.5p higher at 561p, making it the highest Footsie climber.

Northern Foods was less fortunate after saying full-year profits would be £6 million lower than last year. The stock weakened 7p to 164.5p as it said poorer sales to Marks & Spencer had left Christmas trading short of expectations.

Taylor Woodrow was also under pressure after it said the recent cooling in the UK property market had left annual profits towards the bottom end of City hopes.

At one point Taylor shares were off 4% but recovered to stand 0.75p higher at 262p.

One of the biggest rises of the day came from set-top box maker Pace Micro Technology. Shares gained 9% or 3.5p to 40.75p as the West Yorkshire-based firm erased the memory of last month’s profits warning with some bullish comments alongside its interim results.

Computer games specialist Eidos moved in the opposite direction, down 16% or 14p to 72p, after it moved to cool speculation about the price of a proposed takeover.

And offshore drilling contractor Abbot Group weakened 24.5p to 185.5p after warning of an uncertain outlook for North Sea oil production.

The highest Footsie climbers were William Hill, up 15.5p to 561p, Sage rising 5p to 200p, Wolseley up 13.5p to 983.5p and Dixons rising 2p to 155.5p.

The heaviest fallers were Standard Chartered down 24.5p to 928.5p, Cairn Energy off 22p to 1048p, Hays down 2.5p to 123.5p and Yell off 8.5p to 429p.