FTSE makes smallest of gains

Sainsbury’s shares held firm today despite the ailing supermarket group’s third profits warning this year.

The group lowered expectations for half-year results but the news was taken in the City’s stride as shares recovered from an early 3% fall to stand just 2.5p lower at 249.5p.

The performance reflected the subdued mood of the wider market, which was trading in a narrow range – ahead by 0.4 points at 4699.3 at mid-morning.

With markets in the United States closed for a public holiday, dealers in London were not expecting major developments later today.

As well as Sainsbury’s, one of the other areas of interest proved to be the banking sector after rumours again circulated of a Citigroup takeover of either Barclays or Lloyds TSB – ahead 9p and 4.5p at 579p and 451p respectively.

Among other financial stocks, Royal & Sun Alliance rose 0.75p to 77p after announcing plans to transfer more than 1,100 jobs to India over the next few years. Rival Prudential added 3.75p to 482.75p while Norwich Union owner Aviva rose 2p to 570p.

Elsewhere, mobile phone group Vodafone was proving a drag on the market with a fall of 1.5p to 136p while BT Group also slipped 3.25p to 182.5p.

Pharmaceuticals group AstraZeneca was another faller early on, but news that US Food and Drug Administration had blocked its blood-thinning drug Exanta came as little surprise and caused shares to stand unchanged at 2165p.

Outside the top flight, shares in Manchester United were further fuelled by speculation that US tycoon Malcolm Glazer could be about to table his bid for the club.

The stock rose 8p to 280p, although still some way off the 300p minimum that Irish tycoons JP McManus and John Magnier are believed to want.