Footsie hit by collapse of Wall Street 'darling'
London investors were on tenterhooks they waited for news of what could be one of the biggest corporate collapses in US history.
Power giant Enron, whose UK interests include Wessex Water, was on the brink of bankruptcy after rival Dynegy pulled the plug on a rescue bid.
The London market has been in subdued mood and, by lunchtime, the FTSE-100 Index was down 10.2 points at 5195.
Stuart Lane, a trader at Financial Spreads, said: "It's all eyes waiting to see whether Enron is going to go bust or not. This has really knocked markets for six that one of the darlings of Wall Street is facing bankruptcy."
In London, Argos-to-Burberry group GUS was up 7% or 40½p at 626p after half-year profits came in at £131.6m, 12% higher than the same period a year ago and at the top end of City expectations.
British Land rose 19p to 469p after reporting interim results that were also slightly higher than some analysts' predictions.
There was further speculation about a possible bid for international banking group Standard Chartered after the shock departure of chief executive Rana Talwar. Its share price rose by 13p to 838p, although this was well below earlier highs of more than 870p.
Potential suitor Barclays was up 6p at £20.99 and other banks were also fighting back from recent losses, with Royal Bank of Scotland up 11p to £16.38; HBoS edging up 6½p to 814p; and HSBC lifting 5p to 843p.
Plasterboard manufacturer BPB soared 7% or 19p to 280p after it reported "real progress" in the first-half, with signs of a recovery in the American market. It unveiled a 35% fall in pre-tax profits for the half-year, but said the performance was much better than the previous six months.
Engineering stocks affected by Enron's malaise included Rolls-Royce, off 10p at 158p; GKN, 10½p weaker at 289½p; and Smiths Group, down 1p at 663p. Meanwhile National Grid was off 13½p at 445p; International Power lost 4½p at 201¾p; Scottish Power was down 7¾p at 387¼p; and Lattice Group was off 2¼p at 148¾p.
