German false alarm starts run for cover

PANIC broke out in dealing rooms first thing when the German Dax index suddenly sustained a massive fall of 850 points. With plane crashes - a Russian passenger plane was lost overnight - and terrorist attacks on everyone's mind, share prices in London receded on fears that another disaster had occurred.

Dealers soon heaved a sigh of relief and equilibrium was restored when they heard that human error had caused the fall. A ham-fisted dealer in the German futures market created chaos by pushing the wrong button, selling 5,000 lots of EuroStoxx in the DAX futures contract.

Nevertheless it put the wind up many investors and they took profits after recent tasty gains. With Wall Street closed for Thanksgiving Day tomorrow and open for only half a day on Friday, it didn't seem a bad idea to take a back seat. The Footsie fell 54.5 points, before closing 39.3 points easier at 5298.7.

Wall Street opened 77 down following news of a record decline in the US trade deficit in September to $18.7bn from $27.1bn in August. Bears growled that it surely must dampen hopes for a further early reduction in US interest rates.

An easier dollar saw sterling rally from $1.4140 to $1.4215. The euro firmed to 88.4 cents.

A combination of recovery and revived bid hopes helped music giant EMI, which lost £54m in the first half, touch 339 3/4p before closing 13 1/4p better at 331p.

Financial Times publisher Pearson fell 40 1/2p to 839 1/2p after ABN Amro downgraded the stock to reduce. The broker expects the US education publishing market to slow markedly in 2002.

BSkyB lost 30p to 830p ahead of the satellite broadcaster's re-weighting in the Morgan Stanley Capital International indices on November 30. It will see a shift to a free-float basis and Rupert Murdoch's 36% stake will be excluded.

Oils took a turn for the better after the Russian Deputy Prime Minister Viktor Khristenko said he expects OPEC and rival producers will agree soon on measures to stabilise the global oil market. Shell gushed 19 1/2p to 494p, BP 19p to 528p and Enterprise 16p to 446p.

Technology stocks succumbed to heavy profit-taking. Logica lost 89p to 876p. ARM Holdings dropped 31 1/4p to 411 3/4p, with sentiment here not helped by rumours of a possible merger between Palm and Handspring which are among the leading manufacturers in ARM's key Personal Digital Assistant market.

CML Microsystems lost 95p to 412 1/2p on static interim profits and a warning that the company will have difficulty in meeting previous year earnings. Semiconductor shipment schedules for the third quarter are running 50% below anticipated levels.

South African computer services giant Dimension Data dropped 17p to 101p after Morgan Stanley downgraded ahead of today's results. A Merrill Lynch downgrade left Computacenter 37p lower at 286 1/2p.

Eyretel,which develops call centre software and hardware, advanced 5 1/2p to 93p. Turnover swelled to almost 40m after broker UBS Warburg placed 37.4m shares with institutional clients at 90p a share. Seller of the 20.1% shareholding was venture capitalist group Apax.

Luton airport operator TBI shed 2 1/2p to 56p despite chairman Stan Thomas's purchase of 2.2m shares at an average 58 1/2p.

Reflecting increased market activity, broker Teather & Greenwood rose 17p to 118 1/2p and Collins Stewart 10p to 386p.

Ferraris, the medical products company, jumped 17p to 230 1/2p after recording its seventh consecutive year of record earnings growth.

Celsis International closed 4 1/4p down at 12 1/2p after warning of a sharp fall off in activity in September.

Spread betting giant IG Group jumped 26 1/2p to a record high of 647 1/2p. Word is that the newsflow will be bullish in the coming weeks.

Xpertise almost trebled to 10p before closing 4 3/4p better at 8 1/2p after website Sharecast suggested that a £1.2m fundraising and disposal of a loss-making division was imminent.