English win would spur Footsie

COME on, England, give us a lift. A victory against the boys from Brazil would lift spirits if nothing else. The City is just like Emile Heskey, on its knees, and has been for months.

The mood in dealing rooms could not get much gloomier. Dealers are sick and tired of the colour red. It was over their screens like a rash again yesterday as investors continued to race for the exit.

The friendless Footsie lost an early 27-point gain to close 72.1 down at 4580.3. Wall Street did not help, following its overnight fall of 144 points with an early loss of 84. Sterling improved to $1.4985, with the euro closing at 64.3p and advancing to 96.4 US cents.

Apart from ongoing concerns about the pace of recovery in the US, doubts over accounting practices and worries over the threat of hidden liabilities coming to the surface in the tech and telecoms sectors, the market had to contend with yet more bad news.

Media giant Reuters plummeted 56p to 347 1/2p after axing 650 jobs and warning that trading remained ' challenging'. Finnish mobile phone giant Nokia then slashed its forecast for second-half sales growth to 10% from at least 15%.

Then good old defensive retailers were given a kick in the teeth by much weaker than-expected retail sales figures for May. Highly-geared traders hope the sales fall will give the Bank of England a perfect excuse to leave UK interest rates on hold next month.

Lord Hollick's United Business Media lost 30p more to 440p on continuing fears that today's trading statement will contain a profits warning. Financial Times owner Pearson lost 29 1/2p to 716 1/2p. Eyebrows were raised just before lunch when a block of 28.7m

BSkyB shares was traded at 625p. The stock thereafter dropped to 603p before closing 20 1/2p down at 626p.

Last year, Vivendi, the French media giant, sold its 22% stake in the satellite broadcaster to Deutsche Bank in two separate tranches. Dealers said yesterday's big trade was nothing more sinister than a stock delivery operation and was linked to Vivendi.

Plagued by accounting worries and persistent fundraising gossip, electronic equipment group Invensys lost 5 3/4p to 87p. Sentiment was not helped by Robotic Technology's (31 1/2p down at 65p) profits-warning. RT is involved in similar markets in the US. Patent paranoia left drugs giant AstraZeneca 100p down at a low of 2670p. The peak in March was 3625p. A New York court is expected to decide soon whether Prilosec, its £4bn-a-year ulcer drug, should lose patent protection.

Insurances were further unsettled by the decision of Credit Suisse to boost the solvency capital of its Winterthur insurance subsidiary, by £750m. CGNU cheapened 14p to 512 1/2p and Royal & SunAlliance 13 3/4p to 238 1/4p.

Dragged lower by worries about its exposure to the buy-to-let mortgage market, Paragon lost 23p more to 206 1/2p. Broker Old Mutual says such concerns are overdone. The market is failing to grasp that Paragon's exposure to the central London buy-to-let market is low, and its focus is on professional buy-to-let investors.

Talk of a pending bearish trading statement left Computacenter 12p down at 275p.

On a brighter note, West of England water company Dee Valley gushed 30p in a restricted market to 367 1/2p after proposing to return £32m cash to shareholders in a scheme of arrangement that will issue 'B' shares, immediately redeemable for cash.

Aim-listed BetInternet rose 2 1/2p to 14p. With a strong Asian client base, the Isle of Man company has so far enjoyed a good World Cup. Details of a £3.5m share placing at 52 3/4p, which accompanied the encouraging interim results, left computer games group SCi Entertainment 7p down at 50p.

Expecting to hear soon that its biggest client has flown the nest, Edinburgh Fund Managers lost 26p more to a low of 285p.