The Week That Was: It's an ill US wind that blows no good on the FTSE

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The Independent Online

When the US sneezes, as the saying goes, the world catches a cold. The UK has already got a case of the sniffles. Stock market bellwethers Vodafone, BP and AstraZeneca led a retreat in the FTSE after the US released disappointing manufacturing data that sent the dollar into a tailspin.

Though the markets braced for more bad news from across the Atlantic, the deals nonetheless kept piling up here. ScottishPower, as expected, finally fell to Spanish suitor Iberdrola. The market welcomed the £11.6bn offer and seemed to pour cold water on the possibility of Electricité de France swooping in with a counter bid. ScottishPower stock ended the week at 745p per share, well below the 777p per share that Iberdrola tabled.

It was a torrid week for the UK defence industry. BAE Systems got the roughest treatment after press reports suggested that Saudi Arabia was on the verge of cancelling a £10bn deal to buy 72 Eurofighter Typhoon jets, threatening instead to place its order with Dassault of France. The Saudis were said to be upset about an investigation by the Serious Fraud Office into allegations that BAE set up a £60m slush fund to bribe the country's royal family. BAE shares shed 3.4 per cent to end the week at 390.75p.

QinetiQ, the former research labs of the Ministry of Defence, flirted with the 200p valuation at which it was controversially floated earlier this year.

The surge to 189p was fuelled by a decent earnings showing that increased speculation that a consortium it leads will win a £10bn contract to train the British armed forces. Called the Defence Training Review, it is the UK's largest-ever Private Finance Initiative. The Ministry of Defence is expected to announce the winner within the next two weeks. The bidding group including QinetiQ, which is still 19 per cent owned by the MoD, is seen as the frontrunner. That theory was lent additional weight after VT and Lockheed Martin won a £6bn PFI deal to train the UK's military pilots.

Given that victory, VT, which is competing against QinetiQ on DTR, is now seen less likely to prevail on the latter deal.

Fizzy drinks seller Britvic, which markets Pepsi and 7-Up in the UK, unveiled a big drop in profits as health-conscious Britons spurned its products for water and juice.

Yet shareholders could take comfort by looking at the results of Kingfisher, the struggling DIY giant. The group's B&Q chain reported its eighth straight quarter of falling same-stores sales. It shares shed 4 per cent to close at 239p.

And after two years of delays, Microsoft finally released Vista, its first new operating system in five years. However, the packaged product was met with widespread scepticism. Some tech pundits opined that in a world where such things were increasingly delivered instantly over the internet, the boxed-up, off-the-shelf Vista could be the last major software product of its kind. Microsoft shares ended an uninspiring week down 2 per cent.