FTSE DOWN AS U.S
NEWS HITS SENTIMENT
Copyright 2001 www.ananova.com
[ December 13th 2001 ]
slumped in morning deals, conspicuously underperforming
the flat broader market, dragged down by a welter
of negative news from US tech firms overnight,
UK based information carrier Ananova reports today.
the Nasdaq composite added 9.45 points to 2,011.38,
while the sentiment in Asia was much weaker. The
Nikkei 225 index closed at 10,433.45, a loss of
368.07 points, while the Hang Seng index finished
the morning session down 169.84 points at 11,677.22.
was hit hard in opening deals here on the back
of a spate of disastrous news from the US tech
sector after the close of trading in New York,
not least of which was another round of huge job
cuts at Applied Materials and rumours that Global
Crossing is about to go out of business.
debt in Global Crossing, the beleaguered Bermuda-based
fibre-optic network, underwent a dramatic sell-off
yesterday on rumours that one of its subsidiaries
drew down around £200 million of a bank facility.
The intention was to shield the money from a Chapter
11 bankruptcy filing, suggested some analysts.
souring proceedings overnight was another series
of deep job cuts at chip equipment maker Applied
Materials. The company said it would cut around
1,700 jobs, or 10% of its workforce, due to the
continued slump in the chip market. In September,
the company announced some 2,000 redundancies.
was by far the biggest faller on the blue-chip
shares after the IT services and software maker
slashed its sales growth target for its Mobile
Networks unit to 30% - 10 points lower than its
previous forecast. Logica relies on the continued
expansion in this division for the bulk of group
revenue growth, so the warning that mobile revenue
will be below forecast came as a real blow to
Amro cut its rating to 'hold' from 'add' after
the update, while UBS Warburg also turned more
negative, cutting its full-year revenue estimates
by 5%. While reaffirming the guidance it gave
at its Nov 8 annual general meeting of confidence
in delivering strong financial performance, Logica
admitted that UK revenue growth has been weak,
with strong public sector growth offset by declining
revenues in telecoms. Logica dumped 119 pence
to 711 while CMG, Logica's main rival both in
UK IT services and short messaging service software,
dipped 23 to 237.
insurance specialist Innovation rose 2 to 327-1/2
after disclosing that its current trading continues
to provide increased forward visibility of revenues
and therefore it remains confident in the outcome
for the full year to Sept 30 2002. In computer
games software, Eidos extended yesterday's falls
after Goldman Sachs cut its sales estimates by
15% and slashed its EBITDA forecast to break-even
after the company's interim figures yesterday.
Shares were down 4-1/4 to 176-1/4.
Warthog slid 2-1/2 to 52-1/2 after warning that
profits for the full year will be lower due to
the expected delay by the publisher in the launch
of Rally Championship on PlayStation 2. The comments
came as the company reported a dip in first half
profits, but gave an upbeat long-term outlook
for the company and the video game industry as
issues were also much weaker in the wake of Applied
Materials's latest job cuts, with ARM Holdings
down 8-1/2 to 350, and Parthus falling 2-1/2 to
37. Telecoms equipment stocks also took a fall
as the possible bankruptcy of Global Crossing
sent a shiver through the sector. Marconi slumped
1.90 pence to 47.00 and Spirent fell 2-3/4 to
news, Psion slipped 3 to 99 after admitting that
weak macroeconomic conditions have affected Psion
Teklogix revenues in North America. The wireless
technology group, however, said it expects group
revenues and operating profits to be in line with
current market expectations.