FTSE-100 unnerved by weak Nokia outlook

07 Apr, 2004

Top British shares halted a three-day winning streak to end lower on Tuesday after telecoms firms Vodafone and mmO2 slipped on a weak profit outlook from technology bellwether Nokia.
Mining stocks were another weak spot, with stocks across the sector slipping on concerns that copper prices may fall on a supply glut.
The FTSE-100 index ended down 7.9 points, or 0.2 percent, at 4,472.8, recoiling from its highest intraday level in a month at 4,495.2.
Losses in the telecoms sector accounted for more than half of the FTSE's fall, with mmO2 off by 2.2 percent and Vodafone down one percent after Finland's Nokia, the world's leading mobile phone maker, said earnings would be at the low end of its guidance and below market expectations.
"It's knocked telecoms and the tech side. It's a major part of the world economy; one wouldn't want to think of it slowing down," said a dealer.
In the broader tech sector, shares in software firm Sage - already on the back foot following a earnings downgrade from Deutsche Bank - shed four percent.
Turnover was some way below the average daily volume as some investors headed off early for the Easter break and as those remaining chose to hold fire ahead of Thursday's Bank of England interest rate decision. Analysts say it is a close call, although few doubt it will raise them soon.
"It's either going to be Thursday or next month - the housing market hasn't slowed down, mortgage lending is at a record high and consumer debts continue to increase," said Mark Embley, investment director at Laing Cruickshank.
MAN BUCKS TREND: But shares in hedge fund manager Man Group climbed 2.1 percent after it said it had raised a record $805 million in client money for a new multi-currency fund, prompting an upgrade to "add" from brokerage Numis.
Heavyweight support also came from drugs giant GlaxoSmithKline, which led blue chip risers with a 2.3 percent gain as investors moved back into the stock, which has under-performed the broader blue chip market by around 15 percent so far this year.
In February the company said generic competition to two of its antidepressants could wipe out earnings growth this year.
Among mining stocks, Xstrata, which has copper interests, and pure-play copper miner Antofagasta both shed 3.3 percent.
The move came as BHP Billiton revealed a $870 million plan to expand copper mining in Chile, despite analysts' concerns of a looming global surplus later this decade. Copper futures prices are near their highest level in more than eight years. Billiton's shares fell 2.3 percent.
Among mid-caps, shares in Internet retailer lastminute.com fell 4.2 percent after the company said trading for its second quarter to end-March was ahead of its expectations.
Analysts said some investors were locking in profits because the latest news was mostly priced in on Monday, when shares gained nine percent.
In contrast, Close Brothers notched up a 2.9 percent gain after UBS raised its stance on the investment bank.

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