Wall Street holds FTSE back

The FTSE 100 Index failed to get going this morning as it was weighed down by losses on Wall Street overnight.

The Dow Jones Industrial Average closed nearly 40 points lower, leaving the London markets with little in the way of direction or momentum.

The Footsie drifted 5 points lower to stand at 5534.8 by mid-morning, while the FTSE 250 Index was off 8 points to 8586.3.

In the top flight, investors were disappointed by news from brickmaker Hanson that low demand in the UK and ongoing energy costs could hit business next year.

Shares in the company fell 10.5p to 612.5p as the markets were more wary of possible pressures in the New Year than an expected rise in pre-tax profits for 2005.

B&Q owner Kingfisher was also in negative territory after chairman Francis Mackay announced his retirement.

City broker Seymour Pierce said Sir Francis’ tenure “can hardly be regarded as a success” and predicted further changes in personnel following the appointment of Peter Jackson as his successor. Shares fell 1.25p to 233.75p.

Other blue-chip stocks felt the chill after being downgraded by brokers in the City.

Chemicals firm ICI fell 3.5p to 327.5p after Citigroup moved it from “hold” to “sell” amid concerns over pensions liabilities

Aerospace firm BAE Systems retreated 5.5p to 344.75p after it was cut from “buy” to “neutral” by Merrill Lynch which said the share price was almost too high.

But there was better news for supermarkets Sainsbury’s and Morrisons, which topped the leaders board today.

Sainsbury’s gained 7.25p to 316.25p while Morrisons was up 3.75p to 190.75p after exchanging contracts with Somerfield to sell a number of former Safeway stores now trading under the Morrisons name.

And the firm behind London’s congestion charge scheme was also in buoyant mood. Shares in Capita were up almost 2% or 6.75p to 400.5p as bosses expect “pleasing” results for 2005 after strong trading.