Oil puts skids under Footsie

NOW it's the Russians. Oil jumped another $1 to $37 a barrel as major producer Yukos hinted that it might cut supplies in its standoff with president Vladimir Putin.

Coming just a day after terrorist attacks on Iraqi output, the warning has sent the price leaping from the $33 low seen just a few weeks ago.

Risks of higher fuel prices was all the market needed. The Footsie closed down 32.6 points at 4370.7 and overseas markets also turned bearish. Germany and France fell about 1% each.

Wobbly US data on jobs and the service sector left Wall Street's Dow Jones index down 78 points by mid-afternoon.

British Airways was among the heaviest hit, falling 6 1/2p to 263p. Other boom and bust 'cyclicals' suffered. Recruitment firm Michael Page fell 8 3/4p to 171p, despite a 14% rise in first-half sales and some signs of recovery on the Continent, where business has been dismal.

Oil giant BP firmed 3 1/2p to 486p, backed by analysts at JP Morgan and Deutsche Bank. But troubled rival Shell eased 2 3/4p to 399 1/4p.

Acquisitive Aim-quoted exploration company Sterling Energy rose another 1p to 16 1/2p in heavy volumes on further institutional buying. Nearly 7m shares changed hands.

Strong data on property cashouts and jobs helped sterling leap 1.2 cents against the dollar to $1.841, and 0.4p against the euro to 66.7p.

Media group Reuters tumbled another 14p to 338 3/4p as investment bank Morgan Stanley joined the ranks of those that believe it has risen too far. It cut this year's profit forecasts 13%.

Leading bookie William Hill showed again the risks of becoming too popular in the City. It fell 14 1/2p to 532p because its report of 'strong trading' across the business wasn't bullish enough. Punters had been hoping the firm made a Greek killing on the Euro 2004 upset.

Hilton Group, which owns hotels and the rival Ladbrokes bookmaking firm, eased 5 1/2p to 263 1/2p.

Technology services group Computacenter fell 12p to 355p after admitting computer prices are still falling, Germany continues to struggle and overall its markets 'have shown little improvement' although first-half results should hit targets.

Elsewhere Simon Cawkwell, the market punter known as Evil Knievil, was fuming. 'I am astonished the Stock Exchange ever allowed them to relist their shares,' he bellowed, before predicting: 'I think they will prove completely valueless.' The subject of his ire?

Controversial minnow 3DM Worldwide, which says it has invented a revolutionary high-performance plastic. It was suspended last month in a row with Cawkwell and others over the books and predictions made by chairman Ken Brooks.

It leapt 9 1/2p to 64 1/2p on relisting yesterday. The company attempted to clarify the situation. It reported cash from its US prefab homes venture, with £8m guaranteed, and says it has enough money for the foreseeable future.

But it also threw some red meat to the bears. Cash inflow since December was £2.9m - not the £5.4m earlier reported by Brooks. A much-ballyhooed back for Dodge Dakota pick-up trucks made by 3DM in America has sold just 30 units. Production is being ramped up. This year's profits are likely to be 'significantly' below £4.65m forecasts due to poor royalties, though other sales might conceivably fill the gap.

Although large chunks of 3DM shares are owned by Battlebridge Group and Battlebridge Nominees, the company says: 'It's hard to convince people of this, but there is zero connection between them apart from the name and there is no connection between either of them and the company or Ken Brooks.' Cawkwell, who earlier lost £1m backing the group, has now bet heavily against the group. Stay tuned.

Nightclub operator Luminar jumped 18p to 418p after predicting a second-half recovery. First-half sales were weak but profit margins improved.

News of a £15m cash return - 12p a share - was music to the ears of investors in online broadcaster Digital Choice Music, up 2 1/2p to 19 1/4p. The business has turned cash generative and it doesn't need all its money.

Recently-listed technology group Polaron, which makes atomic microscopes for supersmall nanotechnology manufacturing, jumped 7p to 164p after predicting quarterly profits well ahead of forecasts.

PlaneStation, the artist formerly known as Wiggins, fell 0.4 to 6.07p as the new management said it wants venture partners to help develop third-tier airports, such as Kent International at Manston.

Annual losses widened 32% to £17m. With the skies full of low-cost airlines, PlaneStation is backing another one that will use Manston.

DEFENCE group Chemring has had a good war. Demand is booming for its decoy systems, used to shield aircraft against missiles. It sold £15m worth to the US Army to protect helicopters in Iraq, helping lift first-half profits 19% to £5.1m pretax, dividends 10% to 2.8p. It is also chasing major contracts to supply civilian aircraft. At 436 1/2p, down 1/2p, the shares are 13 times likely earnings.