EMI rocking and reeling on Robbie defection fears

Williams' contract expired in February. EMI is said to have offered him a staggering £40m-plus to sign again, but he has decided to say cheerio. Industry insiders say he was unimpressed with EMI's promotion in the US of his UK bestselling album Swing When You're Winning.

EMI's new chief executive of recorded music, Alain Levy, is desperate to hang on to the charismatic performer, but will want to get contract details 100% right. It is crucial for EMI to retain Williams following the Mariah Carey debacle. It paid £38m to sever the American diva's contract after her Glitter album bombed.

Worries that the forthcoming flotation of its CDs-to-books retailer subsidiary HMV will flop also exerted downward pressure on EMI.

Ahead of today's announcement of the issue price - between 190p and 220p - bears roared that it would flop because its Waterstone's books business will struggle over the next 12 months. Financial Spreads' grey market price was sold down to 195p before it rallied to finish at 207 1/2p on late rumours that the £800m-plus issue had been 1.8 times oversubscribed at 200p.

Playing catch-up after the Bank Holiday and Wall Street's overnight fall of 198 points, the Footsie traded 120.4 points down before closing 83.2 lower at 5119.9. The Dow Jones rallied 104 points in early dealings following US productivity data which helped encourage the view that recovery would fuel improved company profits.

Although overall turnover swelled to 2.4bn, most fund managers kept their powder dry ahead of the Fed's decision on interest rates. As expected, the Fed left rates unchanged at 1.75%.

Banks were big fallers, not helped by selected downgrades by Morgan Stanley. Abbey National lost 37p to 1095p after the broker cut its rating to underweight, while Lloyds TSB dipped 25p to 792p for the same reason. Royal Bank of Scotland laughed off rumours of a merger with Spanish bank Banco Santander Central Hispano and closed 72p down at 1988p.

Following widespread adverse weekend comment on last week's disastrous performance and calls for chief executive Sir Christopher Gent's head, selling of mobile phone giant Vodafone continued. It touched 92 1/2p before closing a further 2 3/4p down at 95 1/4p on hefty turnover of 675m. With confidence in the battered telecoms sector shot to pieces, Colt was sold down to 39p before rallying strongly to finish 3/4p off at 43 1/4p.

As the price of Brent crude oil for June delivery slipped to $25.22 a barrel from $25.62 after Iran announced the resumption of oil exports, BP dipped 18p to 576p and Shell 11p to 503 1/2p.

Speculative buying on vague hopes that Granada ( 1/2p dearer at 127p) will launch a bid, lifted Carlton Communications 8 1/2p to 253p. Continuing worries about trading dragged Big Food Group, the former Iceland, a further 5 1/4p lower to a low of 92 3/4p.

Aim-listed Mondas rose 5p to 30p after winning a £1.42m contract to provide quoted stockbroker Brewin Dolphin (unchanged at 94p) with securities and investment software services and support over the next two years. Brewin has bought Popes, a stockbroking partnership, for £2.6m.

Techno minnow Transacsys jumped 2p to 5 1/2p after announcing bid talks. First-half losses were reduced to £0.7m from £2.9m.

Revived bid gossip lifted casinos group London Clubs International 3 1/4p to 17p on turnover of 6m. Housebuilder Bett Brothers advanced 36 1/2p to 360p following more-than-doubled interim pretax profits to £7.4m and a sharply higher dividend of 4.2p.

Ahead of tonight's Premiership clash with Arsenal, Manchester United eased 1 1/2p to 117 1/2p. Irish multimillionaires John Magnier and JP McManus hold 8.6% of ManU, buying their last tranche of shares at around 120p. They say it is purely an ' investment', but the boys in dark glasses expect them to top up their holding to 10pc-plus and then launch an outright bid during the close season.