Market report: Tuesday close

THE telecoms alarm bells were ringing again today after

There had been some hope for telecoms earlier in the session as billionaire 'Sage of Omaha' Warren Buffett splashed out £70m overnight on bonds with a coupon of 9% that can be converted into shares. But even his action failed to rally the depressed sector.

The Sandler Report into Britain's long-term savings industry was deemed to be good news for the £340bn sector, particularly large groups with strong brands and links to banks.

Schroders NV climbed to the top of the blue-chip risers at one stage as it added 10 1/2p to 580 1/2p, with Amvescap, up 23 1/2p to 519p. But the market became remarkably gloomy by mid-session, and Schroders turned down 7 1/2p to 562 1/2p while Amvescap was off 6p at 489 1/2p.

Legal & General slipped 1 1/2p to 122p, Bradford & Bingley moved down 6 1/2p to 321 1/2p and Standard Chartered was off 7p at 670p. The falls were despite the long-term nature of the savings shake-up, which looks likely to benefit the service providers rather than customers.

The FTSE 100 closed down 58.4 points at 4542.9.

Compass suffered a bout of market jitters that depressed its shares 10 1/4p to 380 1/4p after French rivals cut their sales growth forecasts. WPP rallied from yesterday's falls for a gain of 10p at 538p, boosted by a bullish Goldman Sachs note. Amey hit a four-year low of 88 1/2p, down 30%, or 39p, as worries about the London Underground contract mounted. It was joined by Capita, down 8p to 276p, and Hays, off 6 3/4p to 142 1/4p as the business support sector suffered.

Reed Elsevier endured a 15 1/2p slump to 563 1/2p, hit hard by a JP Morgan cut in the group's target price and more rumours of accounting problems.

Reports that the Government was considering introducing a stamp duty tax on the sale as well as the purchase of properties left housebuilding shares weaker. Despite later strong denials from the Treasury and Downing Street Barratt Developments slipped 11 1/2p to 414p and Bovis Homes falling 21p to 382 1/2p.

Ahead of its annual meeting tomorrow, hedge fund manager Man Group lost 10p to 1090p. Competition and accounting policy fears allied to poor performances by US software groups left Sage 12 3/4p off at 147 1/4p.

Specialist steel group Precoat International plans to return up to £5.9m to shareholders following the sale of its Canadian subsidiary to management. The shares rose 13p to 83 1/2p.

Supplier of software systems to the betting industry Alphameric increased its interim dividend by 20% to 0.6p on the back of going back into the black to the tune of £1.10 million. Its shares lost 3 1/2p to 83 1/2p.

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