Profit taking weighs down FTSE

Early profit taking and weak passenger figures from airports operator BAA weighed on the London market today following a poor session overnight in New York.

BAA shares slumped more than 2% after it said the passenger load on its planes had fallen since the London bombings, while investors banked gains made yesterday in telecoms giant Vodafone and Yellow Pages owner Yell.

It sent the FTSE 100 Index into the red by mid-morning, down 13.3 points to 5447.6 as it failed to capitalise on last week’s strong run.

BAA was the heaviest blue chip faller, with its shares down 13.5p to 625p on the back of today’s passenger figures.

It was followed down by Vodafone, whose shares were nearly 2% or 2.25p lower at 149.25p after it hit its highest level in more than a month yesterday.

The selling spread to rival telecoms companies BT and O2, which were also in negative territory.

BT was off 3p to 208.75p after Ofcom published proposals to cut line rental prices, while O2 was down 1.25p to 195.25p, although the price was still close to the level Spanish firm Telefonica said it was willing to pay to seal a £17.7 billion takeover.

Directories firm Yell was also among the fallers – off 8.25p to 469p – after a 2% improvement in the last session on the back of higher underlying earnings.

But there was better news for Cable & Wireless as it made further gains on the back of yesterday’s well-received numbers with a 3% rise, up 4p to 125p.

Recovering retailer Marks & Spencer was also in buoyant mood following good results yesterday and the news that design guru George Davies would stay with the company.

Shares were up 3.5p to 439p – well ahead of the 400p Philip Green was willing to pay for the company – as JP Morgan hiked its target price for the stock to 470p from 450p.

Argos owner GUS reacted well to the news to stand ahead 5.5p to 867.5p, but fellow retailer Next failed to make any gains and Kingfisher slipped 1.75p to 220.75p.