Blue-chips send FTSE below 5,300

IT specialist Sage led the FTSE 100 Index further below the key 5300 barrier today despite delivering results in line with hopes.

IT specialist Sage led the FTSE 100 Index further below the key 5300 barrier today despite delivering results in line with hopes.

Sage was the heaviest blue-chip faller – losing almost 4% of its value – as shareholders took profits after a broker upgrade sent shares higher during the previous session.

This contributed to the gloomy tone on the wider London market, with the Footsie continuing its recent downward trend to shed 22.6 points to 5263.9.

Sage slipped 8.75p to 217.75p, even though the group today issued guidance saying annual pre-tax profits would rise by around 13% in line with City hopes to £204 million and revenues would be £777 million.

Falling oil stocks were a major factor in the wider market’s decline after the price of a barrel of crude fell below 64 US dollars in New York. Industry giants BP and Royal Dutch Shell both weakened more than 1%, off 9.5p and 18p to 620p and 1801p respectively.

Drugs giant AstraZeneca also proved a negative drag after saying an Indian firm had applied to make a copycat version of its Nexium ulcer treatment. Astra’s shares fell 2% or 54p to 2613p.

Hotel group Hilton was also among the heaviest fallers after broker Smith Barney lowered its recommendation on the stock. Hilton lost 6.75p to 332p while rival InterContinental Hotels weakened 14p to 706p.

Insurance stocks tried their best to lift the mood as investors warmed to upbeat comments from industry giant Aviva.

Aviva cheered 19.5p to 641.5p after it said its RAC business should generate annual pre-tax profits of up to £250 million by 2008 and set out “ambitious growth plans” for the recent acquisition, boosting a series of rivals.

The positive momentum rubbed off on Royal & Sun Alliance, up half a penny to 95p, while Prudential lifted 1.5p to 485.5p.

The mining sector also provided a boost as it continued its recovery from last week’s heavy losses. Rio Tinto was up 24p at 2218p and Xstrata cheered 6p to 1354p.

Elsewhere, gambling stocks continued to fluctuate after a warning from Empire Online that full-year profits would be 10% lower than expectations. The second-tier stock fell more than 4% or 4.5p to 93.5p, while PartyPoker owner PartyGaming lost half a penny to 79p in the top flight.

Cambridge-based ARM Holdings saw its share price fall by more than 10% or 12.5p to 104.75p after it shocked investors by scaling back hopes for full-year revenues.

The designer of semiconductors used to power mobile phones and handheld music players forecast year-on-year dollar-based revenues growth of around 15%, compared with the range of between 15% and 20% previously indicated.

The highest Footsie risers today were Aviva up 19.5p to 641.5p, BAT rising 16p to 1181p, United Utilities up 7.5p to 627p and Smith & Nephew rising 5.5p to 476.5p.

The heaviest fallers were Sage Group off 8.75p to 217.75p, ITV down 2.75p to 105.25p, BSkyB off 13p to 523p and AstraZeneca down 54p to 2613p.

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