Footsie down this lunchtime
Troubled British telecoms operator Cable & Wireless endured a turbulent session today after announcing 1,500 job cuts and the suspension of dividend payouts.
C&W shares, which had doubled in recent weeks, fell by as much as 13% in early trading before staging a recovery to stand up by 4% at 100.75p – a 4p gain.
The latest woes experienced by Cable & Wireless proved the main interest for traders in a muted session for the London market. By lunchtime, the FTSE 100 Index was down 3.1 points at 4112.6 after clawing back an earlier 19-point fall.
The improvement for the Footsie was helped by a better-than-expected service sector survey from the Chartered Institute of Purchasing and Supply.
Overnight on Wall Street the Dow Jones Industrial Average also closed up after climbing back from a 36 point fall.
Heavyweight stocks such as oil giants Shell and BP kept London’s blue-chip index in positive territory, rising 5p each to 411.5p and 435.75p respectively.
But in the wake of £6.5 billion losses from Cable & Wireless, telecoms operators were feeling the pressure with Vodafone slipping 0.5p to 131p and BT Group falling 2.5p at 193.5p.
However, mmO2 inched 1p higher to 64.25p after a tie-up with supermarket giant Tesco to sell mobile phones in Tesco stores using mmO2’s network.
Elsewhere retailer Kingfisher lost 0.25p at 266.75p despite seeing first quarter retail profits rise 34%. The growth was driven by a strong performance from its DIY chain B&Q but its electricals operations including Comet fared less well.
Rival electricals retailer Dixons was also down 1.25p at 108.25p.
Topping the list of Footsie risers was Capita, the firm responsible for London’s jam-busting congestion charge, which rose 9.5p to 234.25p after buying back a million of its shares from investors.
Outside the Footsie, discount retailer Matalan saw its shares tumble 9% – off 19.25p at 186p – after “disappointing” take-up on its spring and summer ranges led to a sales slide.
But property group Quintain Estates, which is developing London’s Greenwich Peninsula and the area around Wembley stadium, topped the second division risers, gaining 24p to 281.5p after pleasing investors with a strong set of full year results.
And construction firm Balfour Beatty gained 3p to 199p after being named as production leader and contractor for the £87m rail station at Heathrow Airport’s Terminal 5.
