Drop of 32 points for FTSE

Blue chip stocks were dragged lower on the London Stock Exchange today amid a raft of disappointing updates and as the mammoth US rescue plan did little to budge economic fears.

Blue chip stocks were dragged lower on the London Stock Exchange today amid a raft of disappointing updates and as the mammoth US rescue plan did little to budge economic fears.

The FTSE 100 Index dropped 32 points to close at 4202.2 after a near 2% tumble in early trading on the Dow Jones Industrial Average on Wall Street.

A surprise 1% rise in US retail sales failed to lift the mood, in spite of expectations for the bailout package to be signed off by President Obama within days.

With cheer in short supply among results from a raft of blue-chip stocks reporting in London, the Footsie had at one stage dropped nearly 100 points.

Telecoms giant BT and drinks group Diageo were both under pressure after their updates. Medical equipment maker Smith & Nephew, tour operator Thomas Cook and Rolls-Royce were also in focus on a busy day of corporate news.

Guinness to Smirnoff drinks giant Diageo shed 30p to 877.5p after a sharp decline in first-half sales growth and revising forecasts for profits growth lower.

But BT was the leading faller, down nearly 8% or 8.2p and 97p. Its third-quarter pre-tax profits tumbled 81% after operating losses of more than £500m (€554.3bn) at its troubled global services division.

British Land meanwhile shed 27p to 456.25p as it launched plans for a £740m (€820.4bn) rights issue. Elsewhere in the property sector, Land Securities was 32.5p cheaper at 652.5p, while Hammerson - which announced its own fundraising plans earlier this week - shed 17.75p to 397.5p.

Rio Tinto was also under pressure after raising US$19.5bn (€15.2bn) through a tie-up with state-owned Chinalco which could leave the Chinese firm owning nearly a fifth of Rio. Shares slipped 30p to 1939p.

But Rolls-Royce was up 10.5p at 326p after a shaky start as it boasted record orders despite not expecting to grow profits this year in tough markets.

Medical instruments firm Smith & Nephew was one of the top Footsie risers after results met forecasts and it said it expected "resilient" markets in 2009. Shares rose 37.5p to 550.5p.

Building materials group Wolseley was also making strong advances - ahead 11.75p at 218.75p - thanks to an upgrade from brokers at Citi.

And in the second tier, housebuilder Persimmon was benefiting from UBS upping its price target, leaving the stock 7.5p higher at 329.5p.

Currys and PC World owner DSG International was 2.75p better at 26p in the FTSE 250 - a 12% gain - as chief executive John Browett was said to have played down funding issues for the firm in a meeting with Credit Suisse analysts. Weekend reports said the firm could ask shareholders for cash in a rights issue.

The biggest Footsie risers were Icap ahead 16.25p at 237.5p, Smith & Nephew ahead 37.5p at 550.5p, Wolseley up 11.75p at 218.75p and Lloyds Banking Group up 3.5p at 90.0p.

The biggest Footsie fallers were BT Group down 8.2p at 97p, Legal & General off 4.1p at 54.7p, Inmarsat down 27.5p at 405.5p and Intercontinental Hotels down 33.5p at 498.5p.

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