Music retailer HMV hit a flat note after fixing its flotation price close to the bottom end of its expectations.

The group set its offer price at 192p, a level that could give it a market capitalisation of just under £773m.

But shares in the business, which includes the Waterstone's bookshop chain, fell in conditional dealing ahead of its full listing next Wednesday to 186p.

HMV is one of several firms lining up a float after seeing indications of worldwide economic recovery.

But investors have reacted coolly to the new share issues, and IT services firm Detica was forced to slash its offer price a fortnight ago.

HMV set an initial target range of between 190p and 220p last month but the City is thought to have been concerned about its growth prospects.

Martin Dobson, head dealer at NatWest Stockbrokers, said: "It shows the demand and the confidence isn't there at the moment."