The bearish sounds sent the stock down 4.5 per cent as investors for most of the day as several investors headed for the exit.
A late rebound curbed some of the losses and EMI closed just 4.5p off at 461.5p. However, dealers said that the afternoon rally was somewhat misleading as it was caused by a series of electronic trades just before the closing bell. They pointed out that, in after-hours trading, EMI had resumed its downward path and was trading some 1.6 per cent lower at 458p. The fall came despite an upgrade from Deutsche Bank, which talked of positive developments in EMI's Internet business, and continued talk of a joint distribution venture with Canadian rival Seagram.
The bears' case centres on rumours that the EMI's music sales in some of its core European markets are flagging. According to the rumours, the company is having a tough first half in Germany, where star acts such as Robbie Williams, Janet Jackson and Rod Stewart have failed to catch the imagination of the Teutonic teenagers.
Germany is an important market for EMI and some market watchers believe that the sales slowdown could spread to neighbouring European markets.
Industry experts have pointed out for some time that EMI's roster is not as good as some of its competitors and the feeling is that the European listening public now agrees.
EMI shares have lost nearly 17 per cent over the past couple of months and any further loss will inevitably revive talk of a takeover from Seagram, News Corporation or even Disney.
The overall market toasted the earlier opening hours with a dull performance. Traders, who had to start at 8am to fall in line with their German counterparts, said that the first hour of trading was flat as a pancake as the large players steered clear of the market. Despite the earlier start, most of the large institutions still hold their morning meetings at 8:15am and do not start trading until 9am. The Jewish holiday of Yom Kippur also contributed to depress activity as dealing desks in both London and New York were at less than full capacity.
These series of non-events left the FTSE 100 a mere 16.7 higher at 6,056.5. The second liners were even less active and the FTSE 250 edged 0.7 higher to 5854.8, while the SmallCap firmed 2.9 to 2769.3.
The tank-maker and marine engineer Vickers soared an amazing 80.5p to a 12-month peak of 246p in huge volume of 71 million shares, after firing a broadside at the market with the shock news of a 250p-per-share cash offer from Rolls-Royce. However, Rolls plummeted 10.75p to 215.25p as dealers fretted about the huge premium.
Fellow defence engineer GKN shot 38p higher to 910p after a push by ABN Amro and HSBC. The market whisper is that GKN will counter Rolls' move with its own acquisition.
Engineer Charter joined the party with a 16.5 p rise to 357.5p. The pounds 200m sale of its specialist engineering division to private equity group Candover should be close.
Water utilities were in full flow on renewed bid rumours, a returning passion for defensive stocks and talk of a large research note. Severn Trent gushed 37p higher to 960.5p on vague whispers of a strike from Germany's RWE. Kelda, the old Yorkshire Water, climbed 15.5p to 410p on revived speculation of an offer from Midlands Electricity, while Hyder, another old bid chestnut, rose 16p to 552.5p.
Buying ahead of forthcoming analysts presentation supported Granada and Unilever. The TV and hotels group jumped 32p to 567.5p as CSFB said "strong buy" before the analysts' meeting. The market believes Granada could strike a media deal and buy other stakes in football clubs. Unilever rose 23.5p to 596p ahead of today's bi-annual brokers' presentation. Expect an update on rumoured acquisitions such as France's Revlon.
Retailers had one of their worst days since the invention of shopping. Clothes chains were unsettled by talk of bad trading and imminent profit warnings at Marks & Spencer, 15p lower to 338.75p after a series of downgrades, and Bhs group Storehouse, 8.75p lower to a five-year nadir of 95.25p. Ominous whispers of financial problems is swirling around Storehouse. Next, 36.5p lower to 624.5p and Debenhams, 8.75p down at 311p, fell in sympathy.
Food retailers were hammered by the price war started by Wal-Mart-owned Asda. Tesco, 5.5p lower to 183.5p, said it would also slash prices, and troubled J Sainsbury, down 7.5p to 405.25p, and Safeway, 5p lower to 250p will have to follow suit to survive. Fears of a price war on toiletries sent Kingfisher, the owner of Superdrug, 22.5p lower to 652p and Boots 21p down to 725.5p.
Travel group Airtours rose 9.5p to 410.5p on rumours - confirmed after the close - it could sell some more businesses in exchange for the regulatory approval of its bid for First Choice, 1p higher at 148p.
Metal trader MG was rusty on its first trading day. The stock fell 15.5p below the bottom-of-the-range flotation price of 205p to 189.5p. Ofex- traded Hilfe, a political consultancy group, had a better debut, rising 0.5p to 3.5p, amid talk of a couple of deals in Holland and Germany. The one-time star stock Freeserve dropped 9.25p to 146 - below its 150p offer price amid fears that the Internet bubble is about to burst. Parent Dixons plunged 53p to 1056p.
Drug group Medeva firmed 4.5p to 136.5p amid whispers of a hostile bid from spurned merger partner Elan, down 27.5p to 1975p. AIM-listed SR Pharma soared 23.5p to a yearly record of 406p on talk of imminent licensing deals for its asthma drug.
Independent Radio tuned in to a 18.5p rise to 109.5p on rumours of a bid from Talk Radio while packaging group Waddington wrapped up the rumoured management buyout bid and rose 31.5p to 233.5p.
Oil explorer Sibir lost 1.5p to 10.25p despite talk of positive drilling news at its forthcoming results, while engineer Haden Maclellan plunged 6p to 47p after a profit warning.
SEAQ VOLUME: 1.03BN
SEAQ TRADES: 75,755
GILTS INDEX: 103.86 - 0.39
THE MEDICAL equipment maker Tepnel Life resumed its upward path yesterday with a 3.5p rise to 46p in hefty volume of nearly 2 million shares.
Punters believe that a major licensing deal is in the offing. The company is in talks with a number of large medical companies over the licensing of its revolutionary DNA-purifying kit. The market's talk is that a deal, possibly with the US giant Thermo Electron Corporation, could soon be announced.
THE TAKEOVER buzz around the electrical contractor T Clarke is growing by the day. The shares yesterday touched an all-time high of 228.5p, after a 4p rise as buyers continued to talk of an imminent strike.
The rumour is that the group might have attracted the attention of a large construction group. Names of possible predators abound, but the market favourite seems to be John Mowlem, 0.5p lower at 124.5p.Reuse content