BLUE-CHIP stocks were dragged lower amid a raft of disappointing updates and as the mammoth US rescue plan did little to budge economic fears.

Guinness to Smirnoff drinks giant Diageo shed 30p to 877.5p after a sharp decline in first-half sales growth and revising forecasts for profits growth.

But BT was the leading faller, down nearly 8% or 8.2p and 97p. Its third quarter pre-tax profits tumbled 81% after operating losses of more than pounds 500m at its troubled global services division.

British Land, meanwhile, shed 27p to 456.25p, as it launched plans for a pounds 740m rights issue. Elsewhere in the property sector, Land Securities was 32.5p cheaper, at 652.5p, while Hammerson, which announced its own fundraising plans earlier this week, shed 17.75p to 397.5p.

Medical instruments firm Smith & Nephew was one of the top Footsie risers after results met forecasts and it said it expected "resilient" markets in 2009. Shares rose 37.5p to 550.5p.

The biggest Footsie risers were Icap, ahead 16.25p, at 237.5p, Smith & Nephew, ahead 37.5p, at 550.5p, Wolseley, up 11.75p, at 218.75p, and Lloyds Banking Group, up 3.5p at 90.0p.

The biggest Footsie fallers were BT Group, down 8.2p at 97p, Legal & General, off 4.1p, at 54.7p, Inmarsat, down 27.5p, at 405.5p, and Intercontinental Hotels, down 33.5p, at 498.5p.

FTSE-100

4202.24

32.02

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