A large programme trade by a leading investment bank and falls in the oils and drug sectors compounded the index's plight

A large programme trade by a leading investment bank and falls in the oils and drug sectors compounded the index's plight.The oil majors were savaged by suggestions that Venezuela might drive the Brent price lower by increasing production. London's weakness was blamed on the minutes of the Bank of England's Monetary Policy Committee which showed that members toyed with the idea of increasing rates a fortnight ago. The leading index has shed nearly 4 per cent since rising over 100 points last Thursday and nerves are starting to fray Yesterday's setback came despite an opening rise in the Dow. The FTSE 100 lost another 62.2 to close at a 3-week low of 6329.8 as the sellers won the day for the fourth consecutive session. Another gloomy trading statement robbed Sainsbury of 2p to 385.25p, while a Deutsche Bank push and 950p target hoisted Boots 0.5p higher to 761p ahead of today's AGM.That was a good rise given the market's recent form.

Storehouse was targeted by returning stories of a bid, possibly from Debenhams, but the stock was flat at 128.5p. But more sceptical sources said they believe no talks have so far taken place between the two companies. Less excitable minds said that the spike in Kingfisher share price was due to recommendations from brokers Schroders and Charterhouse and talk of European acquisitions.The rest of the sector was also active. Proponents of the pounds 12.2bn deal were buoyed by speculation that Safeway has halted its share buyback programme - one of the requirements to enter takeover talk. Hot speculative money was said to be chasing the stock in anticipation of a strike by the B&Q-to-Woolworths giant. The rationale for a deal is there: Kingfisher is cash-rich and acquisition-hungry after missing out on Asda, while Safeway is struggling and cheap.

The supermarket chain bucked the falling market's trend and closed unchanged at a five-year low of 234p. GUS's mail-order business is big in frocks and suits and could have suffered the same woes.More optimistic traders focused on Safeway and rehashed talk of a bid from Kingfisher, up 5p to 730p. Two recent downbeat statements, from Marks & Spencer and Debenhams, fuelled concerns that consumers are tightening belts when it comes to buying clothes. More than 5 million shares changed hands, with one investor pushing through a line of 2 million well below the market price.Some dealers fear that GUS could be hit by a sales slowdown.

Pessimists alighted on GUS as growing rumours of difficult trading and impending analysts' downgrades sent the mail order-to-Argos group 25.5p lower to 696.5p. The whispers were given a halo of respectability by the high turnover figure. RETAILERS featured prominently in the stock market's shop window as GUS and Safeway provided dealers with the bear and the bull story of the day. Sir George Bull, the recently appointed chairman, attempted to keep spirits up using his usual pronounced, loud tones that sounded like an army colonel crossed with a 1950s children's television presenter.He had to field criticisms on empty shelves in the supermarkets, long check-out queues and poor technical knowledge at the Homebase DIY business.The shares closed 2p lower at 385.5p.. The gloomy statement prompted analysts to downgrade their full year profit forecasts, with SG Securities reducing its numbers from pounds 725m to pounds 690m.The figures also overshadowed the group's annual shareholder meeting in central London.