Market report: Thursday close

By THIS IS MONEY
Updated:

 

BLUE-CHIPS closed at near-six year lows today, as another swathe of poor economic data and corporate updates hit shares. By the close of trading the FTSE 100 Index was down 51.9 points at 3813.5 and adding to yesterday's 4% fall which had pushed it to an eight-week low.

The market is now close to its July nadir when shares plunged to a six-year closing low of 3777.1. A weak opening on Wall Street contributed to the downbeat mood, as poor economic news, profit declines and continued worries about a US attack on Iraq hit investor confidence.

Among US announcements hitting shares were lower-than-expected figures from broker Morgan Stanley and a third-quarter profit warning by Electronic Data Systems. Poor housing figures in the US also hit sentiment.

In addition, disappointing UK data added to the gloom, after a report showed the manufacturing industry remained in the doldrums.

British Airways, which slipped below its 1987 stock market flotation price of 120p earlier this week, posted another new low with a fall of 2 1/4p to 111 1/4p. As a result of this year's decline in its share price, the carrier is valued at only £1.2bn, losing its place in the FTSE 100 from tomorrow as a result.

Cable & Wireless fell a further 6p to 126 1/2p in the wake of yesterday's profits warning - its fourth in little more than a year - that left the share price at a 17-year low. US securities house Lehman Brothers has cut its target price from 190p to 175p. International Power, which is also being relegated from the top 100 companies, hit a five-year low with a fall of 1 1/2p to 95p.

Only Reuters managed to hold its own, adding 2p to 227 1/2p after marking a 10-year low yesterday as City punters worried about prospects for the financial information systems supplier. The banks it supplies are shedding staff and not spending on new systems because of the market downturn.

Speculators are persistent, if nothing else. Today they were running out that old perennial story of Shell, down 4 1/2p at 383 1/2p, making a bid for BG, up 6 3/4p at 256 3/4p.

Sage fell 4 3/4p to 105 1/4p after US securities house Morgan Stanley slashed its 12-month target price from 150p to 85p. It has reduced its rating on the shares from equal weight to underweight and warns that sustainable returns at the computer services group will remain low. South African technology group Dimension Data fell 1p to a new worst-ever of 15 3/4p as a line of 21.39m shares went through at 16p.

The profit warning from Allders, down 15 1/2p at 113 1/2p, hit rival Debenhams, off 30p at 265 1/2p.

Selfridges lost 7p to 275 1/2p after the company waded in with interim results. British Energy was again a dull market, reversing a slim fall to add 1p to 6p, while the 'A' halved to 3p, as the power generator waited to see if the Government chooses to put it into administration rather than use taxpayers' money to bale it out.

The breakdown in bid talks will make for a sleepless night for shareholders of bedmaker Silentnight, down 29 1/2p at 178 1/2p. Silentnight received and rejected an offer of 190p a share from Famco, a private company representing the interests of its biggest stakeholder, the founding-Clarke family. Famco, which accounts for just more than 50% of the shares in Silentnight, has now called for an extraordinary general meeting so that it can sack chief executive William Simpson and non-executive director Keith Ackroyd. It wants to put its own men in charge and is seeking approval for the original offer.

AIM-listed pubs chain operator Old Monk plunged from 21 1/2p to 7p after it admitted it was in talks with banks about its financial position.

That left rival SFI with a major hangover, down 27 1/2p at 109 1/2p, despite reassurances that first-quarter trading was meeting expectations.

• Prices and indices in this section are supplied from various sources and calculated at different times and may not always match those listed in the tables. Ofex prices relate to the previous close.

The Daily Mail's Geoff Foster on yesterday's trade
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