The London market was dragged lower by mobile phone group Vodafone yesterday as a downbeat trading statement knocked a tenth off its value.

Cable & Wireless and BT joined Vodafone on the way down after it took a cautious stance on revenues and margins, making it the day's heaviest blue-chip faller.

A poor reception to a trading update from drinks company Diageo also weighed on the mood on a busy day for corporate news, leaving the FTSE 100 Index 30.4 points lower at 5439.6.

Markets were closed by FTSE chief executive Mark Makepeace as the FTSE marked its tenth anniversary as a standalone company.

Vodafone slumped almost 11 per cent, or 15.75p, to 129.25p after it said higher levels of mobile phone penetration and the cost of turning around its unit in Japan would impact on margins in the next financial year.

More than 2.1 billion Vodafone shares changed hands amid frantic trading yesterday, a far higher figure than for any other stock.

The negative sentiment rubbed off on telecoms group Cable & Wireless, off 3.75p to 119.5p, and BT, losing 3.5p to 203.5p.

But rival O2 was shielded by the £17.7bn takeover offer from Spanish company Telefonica, remaining unchanged at 195.5p.

Diageo was directly behind Vodafone on the fallers board, losing 26.5p to 836p after warning that the hurricanes that battered the US in recent months could affect its growth in the first half.

Outside the top flight, Northern Foods rose 11p to 155.75p - after the company overcame tough trading conditions to post a seven per cent increase in half-year underlying profits.

Pubs and nightclubs operator Luminar advanced 14.5p to 492p - as it unveiled a five per cent rise in pre-tax profits to £19.9m for the six months to September 1 and said it remained ''cautiously optimistic'' about the rest of its financial year.

Shares in support services group Babcock International hit a 15-year high after it revealed annual results would beat hopes. The stock cheered 15 per cent, up 27p to 210p.

Difficulty in tempting French readers to buy magazines at newsstands and the cost of new launches initially hurt publisher Emap, but shares later rebounded to stand 7p higher at 866p.

Emap said it remained on track to hit its full-year goals, with a strong performance by new launches.

In contrast, fashion house Burberry fell back as it voiced fears that wholesale customers were not ordering as many of its clothes as before. Shares lost half a penny to 395p.

Temporary power supplier Aggreko weakened 2.25p to 249.5p despite forecasting higher profits after post-hurricane repairs spurred demand in the US.

The highest Footsie risers were PartyGaming up 2.25p to 95.75p, Anglo American rising 35p to 1812p, Smith & Nephew up 9.5p to 500p and Old Mutual rising 2.5p to 143p.

The heaviest fallers were Vodafone off 15.75p to 129.25p, Diageo losing 26.5p to 836p, Cable & Wireless off 3.75p to 119.5p and BSkyB losing 9p to 492p.