UK pub company Punch Taverns has cancelled plans to float its shares on the London stock market at the last minute.

The company said it had called off the flotation because it feared that gloomy investor sentiment would weigh on its share price.

The decision to scrap the flotation was announced on Wednesday night, hours before trading in the company's shares was due to start.

The cancelled Punch flotation, which follows a disappointing stock market launch last week from music retailer HMV, could cast doubt over a string of initial public offerings planned over the summer.

Difficult conditions

About 100 companies have announced plans to go public in the coming months, including betting shop chain William Hill and clothes retailer Burberry.

HMV shares, which the company had hoped would trade within a range of between 190p and 220p, received a lukewarm reception this week, closing at just 174.75p on Wednesday.

Volatile trading amid continuing uncertainty over future economic prospects has made the current market environment hostile to new share issues.

The number of new public offerings has fallen sharply since the global stock market boom of the late 1990s came to an end in early 2000.

Fund raising

Punch Taverns, the UK's second biggest pub group with 4,300 licenses premises, had hoped to raise about �250m from its flotation.

The stock market launch would have valued the company at about �700m if mid-range share price targets had been met.

Entrepreneur Hugh Osmond created Punch in 1997 after buying up the pubs business of former brewer Bass.

Two years later, Punch snapped up Allied Domecq's pubs after a protracted bidding war with brewer Whitbread.