FTSE heads towards two-year low
The FTSE-100 Index is heading towards its lowest close since late 1998 as new economy stocks continued to fall heavily.
Despite a slight rally as investors picked up bargains, the Footsie has lost 67.5 points.
It now stands at 5759. The market closed at 5770 on February 10 two years ago but was even lower two months before that, at 5500 in December 1998.
The closing figure is likely to depend on the publication of crucial retail data in the US.
The figures, covering sales last month, are likely to be lower than the corresponding number for January and so increase the pressure for an interest rate cut next Tuesday when the US Federal Reserve meets.
The trigger for today's losses was a profits warning from Ericsson that sent the tech-dominated Nasdaq lower overnight and was followed up by the Nikkei finishing at a 16-year low.
Here, Cable & Wireless has been hardest hit by the bear run on technology stocks, falling nearly 8%, or 53p, to 630p.
Other telecom fallers include Colt Telecom, down 27p at £11.13, Telewest Communications, off 7½p at 127½p and Energis, which fell 9½p to 410½p.
Outside the FTSE-100, Kingston Communications is down 8p at 132p, while Redstone Telecom has fallen 2½p to 59p. Thus is also off, falling 2¾p to 64p.
Among tech stocks, the picture is similar, with software groups Misys and Sage down 22½p and 13¼p at 557½p and 283½p respectively.
But it's an old economy stock that has lost most among the Footsie stocks. Railtrack plunged by over 7% after the Strategic Rail Authority signalled that it would be spending less on major projects. Railtrack is now off 62½p at 785p.
Of the handful of stocks heading upwards, Shire Pharmaceuticals has jumped by nearly 2%, after it announcing its proposed merger with Canadian company BioChem Pharma was proceeding satisfactorily.
The company has put out the statement in response to a number of inquiries about the status and timing of the merger. Shire's reassurance has pushed its shares up 21p at £11.65.
Other movers include Vodafone, the market's second biggest stock, which rose 6¼p to 203¼p, while BT jumped 8½p to 542p.
Prudential is also regaining some of the ground it lost yesterday, moving up 12p to 784p.
