British media group Reuters, battered by slumping spending among its clients in the financial services sector, has reported its first loss since it floated on the stock market in 1984.

Reuters, best known for its news reporting, relies on financial market information and computer systems for the bulk of its turnover.

Collapsing stock markets, on top of the prolonged economic slowdown, have persuaded many large financial firms to delay or reduce their information technology investment.

This pushed Reuters into a pre-tax loss of �88m ($138m) for the six months to end-June, compared with a �375m profit in the same period a year earlier.

But since the market had largely anticipated a gloomy result, Reuters' shares bounced by 1% in early trading.

Cutting costs

At the heart of Reuters' weak performance is Instinet, its separately-listed electronic trading subsidiary.

Market turmoil has hit the firm's bottom line

Caught in a highly competitive niche of the financial technology business, Instinet lost �61m on its own.

Reuters is making strenuous efforts to cut costs, and has announced the sacking of some 10% of its workforce in the past year.

But this is also bringing short-term pain to its bottom line: Reuters reported charges of �156m relating to restructuring, mainly in paying off redundant workers.