FTSE loses ground

A negative reaction to results from retailer Sainsbury’s reflected the mood in the wider London market today.

The supermarket giant fell prey to profit taking after confirming that profits had stagnated as it pursued sales growth instead, leaving its stock more than 1% lower.

It came as oil giant BP fell on the back of lower crude prices, contributing to the Footsie losing 9.6 points to 5430.

The lacklustre performance echoed activity across the Atlantic, where the Dow Jones Industrial Average was around 15 points lower by the close of trading in London.

Investors in Sainsbury’s banked profits even though the group reported 2.1% sales growth in its first half and further progress in its turnaround strategy. Shares had risen to their highest level for six months in anticipation of the results.

But the stock closed down 4.5p at 287.25p, although the rest of the grocery sector held up well as Tesco rose 2.5p to 312.25p and Morrisons edged up half a penny to 174.25p.

Stocks dealing in commodities were out of favour, with oil giant BP weakening 3.5p to 630.5p as the cost of a barrel of crude oil fell below 58 US dollars in New York.

Miners BHP Billiton and Rio Tinto also fell into the red, off 12.5p and 34p to 837.5p and 2310p respectively.

Vodafone shares dipped half a penny to 128.75p as investors continued to reacted negatively to its problems in Japan and its cautious outlook for revenues and margins.

Power supplier Scottish & Southern Energy lost 2p to 1018p as investors worried over the amount of money it was committing to extend the life of two power plants. This announcement masked a 25.5% rise in first-half profits to £336.3m (€494m).

In contrast, commercial property developers were doing their best to lift the mood on the back of strong half-year results from Land Securities.

Upbeat comments on the outlook for the sector against a mixed economic background pushed Land Securities ahead by 5% or 80p to 1583p, while British Land lifted 24p to 997p and Hammerson gained 11.5p to 983.5p.

Elsewhere, music giant EMI advanced 10p to 226p after pre-tax profits of £41m (€60m) were slightly ahead of expectations and it flagged the rapid growth in digital revenues.

News that car dealership Pendragon had made a £422m (€620m) approach for rival Reg Vardy sent shares in both firms up 10%. Pendragon rose 45p to 467.75p, while Reg Vardy lifted 68p to 730p.

And the maker of hit TV show Footballers’ Wives climbed higher as it revealed it had more deals for prime-time dramas in the bag. Shares in Shed Productions cheered 5% – up 5p to 102.5p – after it said changes to legislation had tripled its market.

The highest Footsie risers today were Land Securities up 80p to 1583p, Smiths rising 29.5p to 961p, British Land up 24p to 997p and Kelda rising 16p to 737p.

The heaviest fallers were William Hill down 18p to 532p, Alliance UniChem off 25.5p to 755p, Hilton down 10.25p to 339p and DSG International off 3.5p to 146p.