Footsie in the red

The FTSE 100 Index sunk into the red today as inflation concerns continued to hit world markets.

With little corporate data around to excite investors, a sparkling trading performance from Marks & Spencer was not enough to push the Footsie forward and it closed 39.6 points lower at 5857.3.

Markets across Europe and in New York were all affected by the sell-off triggered by inflation fears, a decline in technology stocks and the prospect of a downbeat earnings season from the US.

Electricity firm Scottish & Southern Energy saw its shares lift 8p to 1180p as investors digested the Government’s long-awaited energy review. However, International Power dropped 10.2p to 285p and British Energy lost 19p to 690p.

Retailer Marks & Spencer wrote a new chapter in its recovery story when it said like-for-like sales jumped 8.2% in the 13 weeks to July 1. That was in line with expectations and sufficient to power the company’s share price up 2p to 585p.

Food group Associated British Foods also benefited with its shares up 4.5p to 816p.

Shares in BAE Systems received a boost after a turbulent few days. Investors returned to the stock with a rise of half a penny to 336.5p.

Gambling group PartyGaming closed a quarter of a penny down at 105.75p following an earlier rise amid hopes that online gaming legislation may not have enough time to get Congress approval in the United States.

Elsewhere, steel group Corus dropped 4.75p to 439.5p after speculation that it could strike a distribution alliance with India’s Tata Steel.

Outside the top flight, Wolfson Microelectronics tumbled 59p – or 13% – to 386.25p after one analyst suggested the firm and others in the sector could be feeling the effects of a weaker-than-expected sales of LCD televisions.

Others in the tech sector were priced lower with semiconductor firm CSR down 89p at 1100p, Spirent Communications off 1.25p at 35p and chipmaker Arm Holdings down 3p at 104p. Software developer Autonomy Corporation also lost some of the gains of yesterday after shares fell 16.5p to 409.5p.

The strong run for easyJet seen since a major profits upgrade on Friday ran out of steam as shares fell 10.5p to 426p after investors took the opportunity to secure profits of their own.

Housebuilders were also under pressure with Taylor Woodrow off 7.25p at 325.25p and Wilson Bowden down 31p at 1462p.

And Taylor Nelson Sofres fell as investors continued to worry about the market reseach company’s warning last week about difficult trading conditions in the United States. Shares were off 10p at 171.5p.

The day’s biggest blue chip risers were Rio Tinto up 27p to 2860p, BHP Billiton up 10p to 1071p, Scottish & Southern Energy rose 8p to 1180p and Associated British Foods up 4.5p to 816p.

The day’s biggest blue chip fallers were International Power off 10.25p to 285p, 3i Group down 25.5p to 890p, Standard Chartered down 36p to 1287p and British Energy off 19p to 690p.