Market report: Thursday 14.00

SHARES in computer software group

The story began to circulate hours after the group announced details of a link-up with Spain's Telefonica Moviles to develop a new mobile phone messaging service.

Brokers have become increasingly bearish about the outlook for Logica. It has experienced a slowdown of its core market - messaging services for use with mobile phones - in Europe and Japan. Its shares have fallen from a peak of 2700p during the past couple of years.

The broader market was in the red, failing to draw inspiration from the sharp overnight gains on Wall Street. 'We see it, but we do not believe it' - that was the verdict of City investors to the surge of 3.1% in the Dow Jones and the 7.8% spurt by the tech-heavy Nasdaq.

Better-than-expected quarterly numbers from internet systems supplier Cisco Systems prompted the leap. But the view in London is that the rally has been overdone and that US investors can expect further volatility. The FTSE 100 index slipped down 13.6 at 5195.5 as the Bank of England voted to peg interest rates.

Banks were hit hard after UBS Warburg maintained its 'neutral' stance on the sector and adjusted its ratings on several stocks. HSBC slid 14p to 840p after Warburg downgraded from 'hold' to 'reduce' and cut its 12-month target price from 830p to 750p. It is urging clients to switch into Royal Bank of Scotland, down 34p at 1984p, where it has repeated its 'buy' recommendation and lifted its target price from 2000p to 2150p. Standard Chartered, off 8 1/2p at 859 1/2p, has also been downgraded from 'buy' to 'hold' with a maintained target price of 850p along with Lloyds TSB, down 19 1/2p at 770 1/2p, where the 12-month target is raised from 800p to 830p.

The target price on Alliance & Leicester, 11p off at 921p, has been reduced from 880p to 800p, but Bradford & Bingley, 3/4p easier at 340 1/4p, has been moved from reduce to buy with the target up 100p to 375p. Broker Teather & Greenwood has lowered Barclays, down 12 1/2p at 600p, from 'hold' to 'sell' and remains 'neutral' on the sector in general.

Music and books retailer HMV made a poor public debut. Priced on Wednesday at 192p, it began trading at a small discount, dipping 10p to 182p as more than 80m shares changed hands. It was a better start to trading for Corin, which makes metal-on-metal hip and knee replacement joints. Placed at 111p by broker Beeson Gregory, the shares opened at 119 1/2p before touching a peak of 127 1/2p.

Housebuilder Persimmon fell 18p to 462 1/2p. Non-executive chairman Duncan Davidson has sold 800,000 shares at 425p, raising an estimated £3.8m.

EasyJet dipped 5p to 395p as US securities house Lehman Brothers downgraded the shares from 'market perform' to 'market underperform'. Lehman is concerned about the proposed takeover of loss-making Deutsche BA. Vodafone extended this week's rally with a rise of 6 1/4p to 110 1/4p having dipped below 100p last week.

Jewellery retailer Signet rose 2p to 121 1/2p after reporting a near 7% increase in like-for-like sales in the first quarter. Dotcom millionaire Jonathan Rowland of JellyWorks fame has built up a stake of less than 3% in Moss Bros, unchanged at 36p, which recently fought off a £46m offer from Shami Ahmed.

Prices and indices in this section are supplied from various sources and calculated at different times and may not always match those listed on the site.

The Daily Mail's Geoff Foster on yesterday's trade
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