Investors hung up on telecoms giant BT after Exane BNP Paribas warned that the group’s underlying business is “teetering on the edge”.

The investment bank downgraded its rating to “underperform” from “neutral” and lowered its price target by 15pc to 260p, prompting shares to skid to a one-week low.

Analyst San Dhillon said: “In our view the market is mispricing BT as they transition from growth to decline.”

BT faces another six months of regulatory uncertainty, as it awaits the final outcome of the Wholesale Local Access review and BT’s fibre consultation, and Exane thinks this is likely to end in “disappointment”.

The FTSE 100 firm is still facing upward pressure on capital expenditure, while the new dividend promise leaves them on the “back foot”, Dhillon added. The bank reckons BT faces an £800m cash shortfall over the next three years to fund a 2pc growing dividend.

Shares, which have fallen by more than 20pc since hitting a 2017 peak in January, slipped 3.5p, or 1.1pc, to 313.4p.

On the broader market, the FTSE 100 stagnated near record highs, closing up 2.81 points, or 0.04pc, to 7,517.71.