VODAFONE weighed the London market down yesterday after the mobile phone giant rattled investors with disappointing full-year revenue forecasts.
The blue-chip heavyweight fell almost 14 per cent and was largely responsible for the FTSE 100 movin
g back down into bear market territory, with the index closing down 40.2 points or 0.7 per cent at 5,364.1.
Banking stocks were also on the back foot amid persistent economic concerns, helping to end the Footsie's three-day winning run.
Vodafone blamed a tougher economic environment and lower-than-expected sales of equipment such as handsets and USB data cards for revenues coming in at the bottom end of expectations. The group's shares ended 20.25p down at 129p, and were the leading Footsie faller.
CMC Markets dealer Jimmy Yates said: "It's been Vodafone that has caught the imagination of many during the session.
"It's now going to be a case of eyeing the Bank of England meeting minutes (due today] to see if there's any move towards a more dovish outlook for monetary policy going forward, so for the time being the bears do seem to be wrestling their way back into control."
Vodafone's downbeat announcement also hit Carphone Warehouse, off 11.15p at 190.6p, and BT, down 7.25p to 198p.
On a brigher note, further hefty falls in crude oil prices helped Cruise ship operator Carnival rise 83p to 1,808p, while British Airways rose 7.25p to 246.25p.
A trading update from Enterprise Inns unsettled the market, with a number of brewing and pub chains down as a result.
Enterprise, which has about 7,500 tenanted pubs, suffered a 14 per cent share price fall after it said weaker beer volumes and increased levels of assistance to licensees had put profits under pressure. Its shares were 46.25p cheaper at 299.5p.
In the second tier, Punch Taverns fell 25.25p to 240p – a fall of 10 per cent – while Mitchells & Butlers slipped 10.25p to 240p.
Housebuilders were big fallers in the FTSE 250 index, with Bovis Homes down 56.75p at 383.25p, Persimmon off 21.25p at 326.25p and Taylor Wimpey 4.75p lower at 43.75p. The declines put paid to the mini- recovery seen in the sector since the middle of last week.
Back in the top flight, shares in Severn Trent rose 4 per cent, or 51p, to 1,398p, after the utility firm said trading remained in line with expectations, despite a drop in consumption among meter customers.
In the banking sector, Royal Bank of Scotland shares were down 4p at 199p after National Australia Bank said it was no longer interested in buying the Edinburgh bank's ABN Amro assets in Australia and New Zealand. The news is a fresh blow to RBS's asset sale plans, after Zurich Financial recently walked away from the auction of RBS's insurance arm.
Barclays was 9.25p lower at 314.75p, while Lloyds TSB lost 5.75p to 320p.
The full article contains 519 words and appears in The Scotsman newspaper.
