Cisco's slide takes UK firms with it

Uk-listed technology companies took another pasting yesterday after Cisco Systems, the US networking giant, failed to provide the market with any short-term reassurance.

While the sell-off was indiscriminate, shares in Dimension Data, the UK-listed South African IT business, had a particularly rough ride as the market fretted that about a third of its sales are Cisco-related.

DiData, which closed down 5.7 per cent at 115p, had already had nearly £1bn wiped off its market value last month after it warned trading conditions had deteriorated.

Cisco, which released its fourth-quarter data after the market closed late on Tuesday night, refused to give guidance on 2002 as a whole, sparking fears that the slowdown was far from over. Furthermore, it said its first-quarter sales would be flat to 5 per cent down on the fourth-quarter level of $4.3bn (£3bn).

Misys, an IT software and services company, finished down 6.5 per cent at 360p – the biggest faller in the FTSE 100 index. CMG, an Anglo-Dutch IT business, lost 5.4 per cent while rival Logica finished down 4.3 per cent. ARM Holdings, a chip designer, fell 4.5 per cent while Marconi, the troubled telecoms equipment maker, lost 4 per cent.

One analyst, who did not want to be named, said: "It was a fairly bad day for tech stocks in general but the Cisco statement was undoubtedly the catalyst for some of the movements."

Cisco reported a 99 per cent fall in net profits to just $7m in the three months ended 28 July compared with the same period a year earlier.