A severe profits warning from the worlds largest networking equipment company saw hi-tech stocks in the UK plummet today.
Cisco Systems warned of a sharp shortfall in revenues and earnings after the close of trading on Wall Street in the US last night, and also announced plans to sack a quarter of its global workforce.
The group blamed the slowdown in the US, as well as softer demand in Asia and also in parts of Europe.
The news was enough to send tech and telecoms shares in London into freefall, and after an hour of trading the FTSE-100 was down 87.9 points at 5678.7 after falling by as much as 100 points in the first 40 minutes.
Ciscos warning came as investors were beginning to believe new economy stocks could be on the verge of staging a comeback after major falls in recent weeks.
Today, however, computer services group Dimension Data plunged a further 8%, or 24p, to 264p while Logica tumbled 67p to 815p. Chip designer Arm Holdings was also down, falling 20p to 306.5p, while CMG fell 21.5p to 414p.
Among the telecoms, mobile phone giant Vodafone dropped 15p to 201p, Marconi was down 19.5p to 315p, BT fell 32p to 544p and Cable & Wireless dropped 26p to 489p.
There was slightly better news for oil stocks, which showed little impact from the explosion at the Conoco oil refinery in Lincolnshire yesterday.
BP Amoco was up 8p at 608.5p, while Shell moved ahead 6p to 576p.
EGi News 17/04/01
