Telecoms group Cable & Wireless is leading the FTSE 100 fallers as the market heads south, with further worries about the global economy prompting a spate of profit taking.
C&W's full year results came in above forecasts, with a 36% rise in earnings to £822m. But dealers heard talk that Cazenove was placing shares on behalf of some of the directors, which could explain some of the share price weakness.
Overall, the leading index is down 75.57 points at 4392.84 following news last night that the Federal Reserve had cut its outlook for the US economy and expected unemployment to continue rising. Dealers said the news was an excuse for investors to cash in some of the profits made from the recent market gains.
Property companies were unwanted after British Land wrote down the value of its portfolio by £3.2bn. The company has lost 19p to 395p while Land Securities is 20.75p lower at 497.25p.
Banks fell back, too, with Royal Bank of Scotland down 1.5p at 40.9p and Lloyds Banking Group off 1.4p at 69.1p.
In fact, the only riser in the FTSE 100 at the moment is platinum specialist Lonmin, lifted 9p to £12.76 on hopes for an Obama-backed boost for catalytic converters which use the metal. It has also been helped by Citigroup raising its price target for the company from 859p to £13.85. Citi said:
"During a roundtable meeting with sell-side analysts this week, Lonmin management came across as confident, but not recklessly over-confident. We think this is the right stance for the moment as progress is now steady, but there is some way to go yet and the next few months are key for both Saffy and Hossy shafts.
"Lonmin has taken prudent action in terms of culling uneconomic production and right-sizing the workforce. The challenge now is to deliver on Saffy's transformation with that reduced workforce and to make some tough decisions on Hossy by year-end. The jury is still out, but we see it as
increasingly being won over by management."
Among the mid-caps, pubs group Mitchells and Butlers has slumped 14.5p to 246.75p after chief executive Tim Clarke resigned as the company paid £69m to close out a long-term interest rate swap. Mark Brumby at Blue Oar Securities said:
"Well, where do we start? Historic it may be but the announcement of more swap losses and the resignation of the group's chief executive are unlikely to go down well with investors. The group has lost around £1/2bn of shareholders' money on the ill-fated financial instrument and the group has lost its chairman, chief executive and chief financial officer since losses were first announced. As regards trading, and trading is, ultimately, what it's all about, M&B is outperforming its competitors and is taking share. Operationally it is a winner and we continue to support the shares."
