Footsie down on US technology forecasts

Gains by drugs stocks were not enough to tempt investors into the wider London market today as a slump in global indices took its toll.

Pharmaceutical giants GlaxoSmithKline and AstraZeneca were the biggest top-flight climbers, up 22p and 35p to 1275p and 2276p respectively, after a court ruling that the patent on one of US counterpart Eli Lilly’s drugs was valid.

But the FTSE 100 Index weakened 29.2 points to 4916.2 by mid-morning as investors took fright at a clutch of disappointing forecasts from US technology giants.

New York’s Dow Jones Industrial Average slumped 125 points last night after IBM reported earnings well shy of expectations and iPod maker Apple’s revenues forecast came up short.

Among those to feel the backlash in London was Sage Group – the only technology stock left in the Footsie – which fell nearly 3% or 5.5p to 203p. It sells accountancy software to small and medium-sized businesses, many of which are based in the US.

A heavy faller for the second consecutive session was steel maker Corus which lost another 3% or 1.75p to 51p as investors fretted over lower metals prices. Miners continued their decline, led by the 47p fall of Antofagasta to 1153p and BHP Billiton – off 13.5p at 660.5p.

Electricals chain Dixons countered the sell-off as investors warmed to a milestone deal in Russia. Shares lifted half a penny to 149.5p after it signed a co-operation deal with Eldorado and securing an option for a 1.9 billion US dollars (£1.01bn) takeover offer for the Russian retail giant.

One of the heaviest fallers outside the top flight was Highbury House Communications, down 35% or 3.37p to 6.25p, after a takeover by rival Future was ditched.

United Business Media also weakened after reaching agreement to sell market research arm NOP World to German research group GfK for £383 million, slipping 9.5p to 535p.