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Engineering, telecoms lead FTSE off pace

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Trying to snap a seven day losing streak the FTSE was unable to turn the tide by late afternoon, end...

Trying to snap a seven day losing streak the FTSE was unable to turn the tide by late afternoon, ending the day down 8.90 points at 3,925.



Investors dumped shares in companies threatened with relegation to the FTSE 250 in tomorrow's reshuffle and took fright at delays to defence spending-related projects.



Cable&Wireless extended yesterday's deadly 43% fall with another 15% fall today, taking its market value to around £900m and marking it out for definate booting from the FTSE 100 index tomorrow.



Investors continued to dump the stock after management stumbled again over a tax liability that may wipe out any remaining cash in the bank - it closed down 7.25p at 40.5p today. ,/p>

BAE Systems lost 16.5p to 163p after news of delays to one of its more important defence-related programmes, the Typhoon fighter.



Rolls-Royce followed suit, dropping 5.75p to 115,75p despite putting out a press-release of its own relating to sales of engines to New Zealand.



MmO2 was sent down 1.75p to 47.25p after rival Hutchison Whampoa unveiled the first pricing plan for next generation 3G mobile phone services: handsets are to cost up to £400 each, and 12-month contracts up to £100 per month, all targeting the business user.



Alliance&Leicester gained 31p to 764.5p on expectations it is going to report a jump in profits because of strong sales of mortgages.



Positive news on a new treatment for depression in elderly people helped send GlaxoSmithKline shares up 28p to £11.96.



The FTSE 250 index shed 22.9 points today, closing at 4,396.4.



Retailer Brown Group led the index down with a 13.5p slump to 144p.



A lot of focus was on companies that may be elevated to the FTSE 100 index in tomorrow's reshuffle.



Whitbread led on this score, adding 10p to 565p, valuing the firm at close to £1.7bn.



Investors also bet on technology.



Dimension Data added 1.5p to 28p, Computacenter added 18p to 330p, and First Technology added 22.5p to 222.5p.



The US Dow Jones Industrial Average index is up about 50 points at 8,520.


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