Transatlantic headwinds hit Footsie

FALLS on Wall Street dragged the Footsie lower yesterday as the London market paused for breath after recent rallies.

The FTSE 100 Index closed down 36.93 points at 5,555.97 after commodity stocks posted heavy falls and mixed economic news sent America's Dow Jones lower in early trading.

Resources-based stocks have gained in recent sessions following a run of positive economic figures, including a better-than-expected Chinese manufacturing report. This helped the Footsie to climb 44 points on Friday.

Will Hedden, sales trader at IG Index, said: "The bias for stock markets, following the strong run in September, remains up - but it feels as if they need another catalyst at the moment to provide a shot in the arm for sentiment."

With investors on edge ahead of jobs numbers in the United States later in the week, Xstrata fell 32.5p to 1,209p and BP slipped 10.4p to 430.1p having shown signs of recovery in recent days. News of a pick-up in UK construction activity last month - despite a fall in house building - failed to help stocks, although the industry survey data gave sterling a boost. The pound performed well against most major currencies, particularly against a weakened euro, up 0.8 per cent to €1.16.

Satellite firm Inmarsat was another faller after news that hedge fund Harbinger was looking at the possible sale of all or part of its 28 per cent shareholding in the group.

Shares in Inmarsat dropped 13.5p to 655p as it hit hopes that Harbinger will bid for the firm.

Shares in supermarket Tesco made tentative gains ahead of the group's keenly awaited half-year results this morning, with shares up 2.3p at 430.4p.

While profits are expected to rise to 1.6 billion compared to 1.42bn a year earlier, all eyes will be on latest sales performance after growth nearly ground to a halt in its first quarter.

News on key hires helped National Grid and FTSE 250 firm Yell move higher.

Power group National Grid rose to the top of the Footsie risers board - up 12.5p to 553.5p - as it named former Cadbury finance chief Andrew Bonfield as finance director from 1 November. He will replace Steve Lucas, who retires from the board at the end of this year.

Yellow Pages firm Yell added 1p to 15.5p on the appointment of Tony Bates - formerly of telecoms group Colt and music firm EMI - as chief financial officer.

Also in the FTSE 250, Premier Foods shares jumped 10 per cent after the UK's biggest food producer confirmed it was considering a sale of meat substitute Quorn as it comes under pressure to reduce a 1.4bn debt mountain.

Shares improved 1.7p to 17.9p as it said it received a number of takeover approaches for the business.

There was also a rise for Newcastle-based oil services firm Wellstream after press reports linked American giant General Electric to a takeover bid.Shares jumped 15.5p to 789p.

Shares in Iomart, the Glasgow-based website hosting outfit, rose by a further 6.7 per cent or 6.25p to close at 99.75p, adding to gains on Friday in the wake of the company's pre-close update, which outlined some of the progress made in entering the "cloud computing" market.