The fallout from the sharp drop in the United States’ Nasdaq stock market spilt over into hi-tech shares on this side of the Atlantic yesterday, where the index fell to its lowest since late January. The fallout from the sharp drop in the United States’ Nasdaq stock market spilt over into hi-tech shares on this side of the Atlantic yesterday, where the index fell to its lowest since late January.
While the FTSE-100 index of leading shares ended only slightly lower, the techMARK index dived nearly 9 per cent, shedding 351.7 points to end at 3,731.57.A notable loser was lastminute , the online bucket shop, whose shares fell 27.5p to 195p – almost half its flotation price last month of 380p per share, and far below its high point of 555p, which it briefly touched on its first day on the market. Few of the technology stocks got off lightly: shares in Scoot plummeted 52 pence to 151p, while Freeserve, the free internet service provider part-owned by the Dixons Stores Group, got off relatively lightly, ending just 26.5p or 6 per cent lower at 431.5p.The pattern of falling “new economy” technology shares and rising “old economy” shares in companies such as banks and retailers was repeated across Europe.The abruptness of the fall left some hi-tech investors querying the logic behind the selling decisions. At the Motley Fool website, which offers financial chatrooms, one investor with the nom de plume “cheekychimp”, wrote: “I didn’t expect companies with a PER (price/earnings ratio) of 450 to stay at that rate, so I sold some and kept some.

What I find confusing is that all my other holdings are falling too. Why should an oversold Naasdaq cause my shares in Peterhouse, MICE Holdings and Bowthorpe, to name a few, follow suit?”Another investor responded:”So the market is idiotic, but wait for the stampede to end… It’s a jungle out there and the herd is on the move.” As if to echo those sentiments, investors flocked to a new Internet investment fund launched yesterday. The £400m Amerindo Internet Fund announced it would scale back requests for shares from big institutional investors in favour of individuals.. Bidding in the government auction for five next generation mobile phone licences rose to £11.5bn yesterday as two more companies withdrew amid speculation that the downturn on global stock markets could soon force other players to the sidelines. Bidding in the government auction for five next generation mobile phone licences rose to £11.5bn yesterday as two more companies withdrew amid speculation that the downturn on global stock markets could soon force other players to the sidelines.
Sonera, the Finnish wireless group that had partnered with Virgin and Tesco in SpectrumCo, pulled out in the second of the day’s bidding rounds.

The withdrawal came after the company’s stock dived 15 per cent Monday as analysts questioned the high price of a licence.Echoing comments from other retired bidders, Sonera said it had quit the auction because licence prices had become uneconomic. “The competitive situation in the UK network operator sector requires such high inputs from third generation licences that Sonera does not consider them justified in view of its business,” the company said.One round after Sonera’s departure, Epsilon, backed by Japan’s Nomura investment bank, also withdrew. With Crescent Wireless and eircom having departed on Monday, today’s 99th auction round will see nine companies remain in the licence battle.Speculation mounted that One.tel, which used its first of three bid waivers yesterday, could be the next group to pull out. The Australian consortium includes Rupert Murdoch’s News Corp among its backers.Once one more company withdraws, a subtle rule change comes into play. This will allow any of the remaining eight bidders to designate a one-day recess in the bidding.Analysts are unsure how this will play out.

The Radio Authority, which is conducting the auction on behalf of the Department of Trade and Industry, said the rule was included to give bidders an opportunity to scrutinise end-game strategy.Yet whatever strategies the companies held going into the auction, which began in early March, such planning would now seem likely to have fallen by the wayside given the high levels bidding has reached. It is now expected that each licence will cost at least £4bn.At the close of bidding yesterday, Vodafone remained in top spot for Licence B, which offers the most spectrum available to an incumbent operator, with a bid of £2.46bn. Canadian mobile operator TIW led the way for Licence A, which offers the most spectrum of any licence but is reserved for a new entrant, with an offer of £2.32bn.NTL Mobile, a division of the cable operator, was in the pole position for Licence C with £2.18bn on the table. British Telecom and One2One were tied with bids of £2.23bn for Licence D, while Orange prevailed with an offer of £2.33bn for Licence E.. Tthe carve-up of regional newspaper monopolies by a few big press groups gained new impetus yesterday when the Competition Commission cleared three competing bids for Newscom, the publisher of the Southampton Daily Echo. Tthe carve-up of regional newspaper monopolies by a few big press groups gained new impetus yesterday when the Competition Commission cleared three competing bids for Newscom, the publisher of the Southampton Daily Echo.
The three bidders are Newsquest, bought last year by the US publisher Gannett, Johnston Press, which last year acquired the Portsmouth and Sunderland group, and Trinity Mirror, which merged in the autumn.

Oddly, none seemed in a hurry to make an offer for Newscom, although sources said that could change before month end.”Of course we want it,” said an advisor to one bidder. “We have said from day one that this industry needs consolidation. All three parties feel that.”Newscom officials, meanwhile, huddled behind closed doors apparently planning an auction for the company, which has a market capitalisation of about £370m. The firm’s finance director, Keith Sadler, has knocked it into shape in recent quarters, boosting profit margins by 2.8 percentage points to 19.7 per cent in the six weeks to end-December.Newscom shares closed up 30p at 1,545p.. RJB Mining, the coal company seeking more than £70 million in Government aid said that it may have to close two collieries after reporting heavy losses. RJB Mining, the coal company seeking more than £70 million in Government aid said that it may have to close two collieries after reporting heavy losses.
The group, which controls about 60% of British coal mining, made a loss after tax of £130 million in the year to December 31, compared with a £40.1 million profit in 1998.The company are now threatening to close Ellington colliery in Northumberland and Clipsone colliery in Notinghamshire with the total loss of 520 jobs.RJB said last year’s losses included one-off charges of £141 million.