Market report: Wednesday close

TALK of a major hedge fund being in trouble did not help market sentiment as share sell-offs impacted from the start. President George Bush's attempt to shore up US capitalism and prevent corporate fraud was seen as ineffectual. London echoed that sentiment and searched for the next accounting problem.

Baroness Hogg, chair of 3i Group, summed up the market mood when she told shareholders at the annual meeting there was a 'high degree of business uncertainty‘. 3i shares fell back 26 1/2p to 632 1/2p. Financials were hard hit as Amvescap slipped 29 1/2p to 460p and Barclays fell 20p to 482p. Financial information provider Reuters suffered a 7p setback at 333p.

The London market opened with a double-digit drop and within half an hour had fallen by 92 points. The FTSE 100 index rallied throughout the session but was ended down 122.8 points or 2.7% at 4420.1, with all the other indices in negative territory. Yesterday's sell-off in the business services sector was led by Capita, where there were worries about what it will reveal on the 25th of this month about its accounting policies. Today its shares slipped another 20p to 256p, giving it leadership of the Footsie fallers.

Amey put on 1/2p to 89p as the RMT union won its ballot for action that will bring the London Underground to a halt later this week, causing possible delays to Amey's contract. Anite tumbled 24 1/4p to 35p, heading the FTSE 250 losers as UBS Warburg and Schroder turned negative. Sage, where competition worries from US giant Microsoft persist, slipped 1 1/2p to 145 3/4p.

Doubts about the safety of HRT - hormone replacement therapy - cast a shadow over the pharmaceuticals sector, as there are other drugs used to treat the 38% of menopausal women who take such treatments in the US alone. Northern Ireland-based Galen Holdings, which earlier this year obtained UK approval for its Estrace intra-vaginal ring for delivering HRT, was hardest hit, down 35p at 420p. It had been hoping to break into the £2.5bn oral HRT market.

Fears about related products hit the bigger pharmas. Europe's second-largest drugs maker AstraZeneca lost much of the gains it made yesterday on the back of its cholesterol-busting drug Crestor. It fell back 181p to 2465p. GlaxoSmithKline was also hit, down 70p to 1270p.

Telecoms were once again under pressure, as they had been in New York. ABN Amro raised its recommendation on mmO2 to add from hold, setting a target price for the mobile phones group at 52p. But in this market its shares merely responded with a 1p setback to 45p. Vodafone slipped another 3 3/4p to 88 1/4p.

With the dollar still under pressure, UK groups exposed to the US currency reacted adversely. Reed Elsevier was suffering again, down 13 1/2p to 550p. EMI, with 34% of its turnover in the US, lost 15p to 237p.

The removal of Unilever and Royal Dutch/Shell from Standard & Poor's 500 index did nothing for their share prices. Shell fell 23p to 476p and Unilever lost 19p to 577p. S&P will now include only USbased companies in its prestigious index.

Thus Group reassured the market sufficiently at its annual meeting today to produce a 3/4p rise in its price to 12.

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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