Giants slug it out on day of US close

There was a battle between the UK stock market's giants yesterday, with another dose of weakness in the recently beleaguered telecoms sector, especially Vodafone, being offset by strong gains in the oil majors and GlaxoSmithKline.

The battle was close for much of a session affected by the absence of any substantial US activity.

A late rally in the telecoms, especially BT, nudged the FTSE 100 into positive territory just before the close. At the finish the index was a net 5.7 firmer at 6,094.0.

At its worst the 100 index was down 23.1 at 6,065.2. Its best of the day, when it just edged back over the 6,100 level, came not long before the close.

A strong performance by Corus, the steelmaker, plus good gains in a number of the housebuilders, helped keep the decline in the FTSE 250 to a minimum it closed 2.4 off at 6,716.8. The FTSE SmallCap was finally 4.2 off at 3,259.3 and the Techmark 100 index of leading technology stocks 14.6 lower at 2,505.39.

US markets were closed yesterday for the President's Day holiday. That ensured a poor day in terms of turnover, which at 1.5 billion shares, was the lowest daily total for weeks.

Wall Street's closure was not the only limiting factor on turnover. There was no market sensitive domestic economic news yesterday at the start of what is a generally quiet week for data.

The minutes of the Bank of England's monetary policy committee meeting held on February 7th, which brought a 25 basis points reduction in UK interest rates, are published tomorrow and the Confederation of British Industry monthly survey of industrial trends is expected on Thursday.

The action in London was overwhelmingly concentrated in the heavyweight sectors, the telecoms, techs, drugs and oils.

There was no respite for the telecoms stocks, which had to endure another session of intense pressure. Nowhere was that pressure felt more than Vodafone, which once again lost its number one position in the FTSE 100 market capitalisation list to BP Amoco.

Vodafone shares dropped below the 200p level for the first time since the start of 1999, hit by growing concerns about its debt burden and the possibility that its proposed sale of Infostrada, the Italian telecoms company, to Enel, might run into problems from competition authorities.