Market report: Thursday close

THE BANK of England's decision not to change interest rates failed to lift the long shadow emanating from Switzerland, where Zurich Financial Services has lost $2bn (£1.3bn) and plans to raise up to $2.5bn via a rescue rights issue.

British financial services companies descended into the gloom with many hitting all-time lows as dealers attempted to flush out those which might have to resort to raising cash to cover mounting losses caused by the stock market fallout. It was a strategy that pushed the Footsie below the crucial 4000 mark with July's lows looking as though they could breached.

Accompanied by what appears to have been a series of sell-offs, the FTSE 100 ended down 15.9 points at 4011, having earlier dropped to 3960.9.

Royal & SunAlliance swiftly emerged as the favourite to raise cash and its shares added 7 3/4p to 121p early on before they settled for a 1 1/2p fall at 111 3/4p.

The mighty Prudential's decision to chop 10% off payouts for two million with-profits pension and bond holders, knocked it back 6p to 464 1/2p. Aviva slid 9 1/2p to 454 1/2p while Legal & General lost 2 3/4 to 111p. Old Mutual fell 1 1/2p to an all-time low of 75 1/2p and Friends Provident slipped 4 1/4p to 130p. An early rally by Europe's biggest company, BP, faded, leaving it down 4 1/2p at 456p.

With Relegation Day four trading sessions away, companies that face losing their prestigious Footsie status when the selection committee meets next Wednesday were looking nervous.

British Airways looks doomed as its shares slipped 3 3/4p to 131 3/4. Music group EMI suffered again from yesterday's downgrade from Morgan Stanley Dean Witter and dropped 6 3/4p to 171 1/2p, also a new low.

Yesterday's profits warning at International Power continued to affect its share price and future Footsie status and it lost 3/4p to 112p.

Meanwhile, the candidates patiently waiting for promotion from the lower divisions reinforced their case, led by Alliance UniChem, up 4 1/2p to 565p. Good figures from supermarkets operator Somerfield added 1/2p to its share price, now 106 1/2p.

Software group Marlborough Stirling issued a trading statement that included a profit warning ahead of interims. Its shares plunged 56.2% to 23p, a fall of 23p and an all-time low since it floated in 2001.

Premier League Sunderland joined the growing list of troubled football clubs and optimistically forecast losses would not 'exceed £3m'.

The Black Cats recently signed strikers Tore Andre Flo and Marcus Stewart on three-year contracts costing £10m. The shares scored an own goal, slipping 37 1/2p to 155p, a five-year low. It helped to depress the whole soccer sector where fans find their enthusiasm for a club is a poor return when it comes to their wallets.

Manchester United slipped 1/4p to 102p.

Holidaybreak said the sometimes appalling weather across Europe had not hit its camping and mobile homes division and winter holiday bookings were going well.

Its shares shone 9p to 530p. Staffware was back in profit at the interim stage and reinstated its dividend, giving its shares a 17 1/2p boost to 337 1/2p.

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Today's gainers and fallers
Geoff Foster reports on yesterday's trading