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Highs are just a distant memory.

The Millennium shares sell-off continued yesterday, despite the European Central Bank's decision to freeze interest rates.

As the FTSE-100 Index slid to six-week lows, last week's record highs seemed a distant memory. The blue-chip benchmark closed 130 points down at 6535.9.

Fears of an increase in the cost of borrowing at the Bank of England and the US Federal Reserve still rocked sentiment while wave after wave of profit-taking lopped chunks off hi-tech stock valuations.

Even a modest recovery on the Dow Jones industrial average from Tuesday's 360 point wipeout failed to stem the bloodshed as the Nasdaq index of high-tech companies continued tumbling.

The Footsie fallers board read like a roll-call of last year's glamour stocks, with top-ten dogs of the day including IT group CMG down 471p to pounds 38.50, microchip designer ARM Holdings off 340p to pounds 36.69, Energis down 243p at pounds 26.92, Sage Group 50p worse at 649p, Marconi 70p lighter at 956p, Misys down 55p at 815p and Colt Telecom 182p down at pounds 28.00.

Even advertising group WPP, which sees much of its future growth in the Internet, fell heavily, losing 95p to 875p. Bad news for newly-knighted chief executive Martin Sorrell.

Heavyweights BT and Vodafone AirTouch both slid at least five per cent, causing a large portion of the Footsie's tumble. BT ditched 84p to pounds 13.39 and Vodafone lost 14p at 280p.

Outside the Footsie, Internet stocks also fell victim to the slide.

Freeserve fell 34p to 488p, online auctioneer fell 245p to pounds 11.0 and Geo Interactive Media dropped 215p to pounds 14.87.

Internet involvement was not necessarily the kiss of death, however. Whispers that shell company Pascoe's could be close to making an acquisition in the online industry saw shares rocket 111 per cent - a 25p jump to 47p.

But with the tiddler's 7.8 million shares closely held, the jump hardly spelt windfalls for a multitude.

While technology groups took a battering, investors in search of a safe haven in the storm moved into traditional industries.

A number of utilities gained, with PowerGen up 14p to 450p, National Power ahead 21p to 385p and BG 10p warmer at 374p.

Retailers also offered a boost amid hopes of a strong Christmas trading period.

Boots stepped up 14p to 605p, while Woolworths-to-Comet group Kingfisher gained 12p to 649p. Hopes of a good set of Christmas sales figures also helped the shop-owners pull ahead.

Next unveiled a robust set of seasonal sales numbers - up 15 per cent across the group - but saw its shares slip 15p to 600p as broker Dresdner Kleinwort Benson remained cautious about the group's long-term prospects.

Jamies Bars, operator of City watering holes well-known to dealers, fizzed 1p to 66p after reporting an 8 per cent increase in like-for-like sales in the month to Christmas.

Outside of the leading index, both the FTSE 250, down 68.1 at 6364.0, and the FTSE Small Cap, off 46.8 at 3051.6, index buckled under the pressure of significant losses from technology-related stocks. Both indices had held up well on Tueday as the FTSE 100 was routed.

Psion was down 419p at 2,421p, Merant off 34p at 353p and Admiral, down 110p at 1,375p, not far behind.

Computer games developer Eidos, down 587p at 4,348p, was punished by a Merrill Lynch downgrade - the broker moved to 'accumulate' from 'neutral' citing the poor take-up of Tomb Raider 4 in the US as the rationale for the move.

But speciality chemicals outfit BTP, up 28p at 361p, managed to shine as talk of an offer from Swiss group Clairant did the rounds, while encouraging comments from CSFB underpinned Iceland, 19p higher at 280p. The broker is said to have told its clients that the grocer had an impressive festive period.

Still in the sector, Safeway ended an impressive 12p better at 227p on vague speculation of a link-up with Wm Morrison, down 7p at 128p.

Stocks with an exposure to Asia, and in particular Hong Kong, exerted further downward pressure on the blue-chip index.
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Title Annotation:Market Report
Publication:The Birmingham Post (England)
Date:Jan 6, 2000
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