Chilly mood hits FTSE

The political row over Labour Party loans hit the stock market today after one of the businessmen involved quit as the boss of Capita.

The political row over Labour Party loans hit the stock market today after one of the businessmen involved quit as the boss of Capita.

Shares in outsourcing specialist slumped 3% today after Rod Aldridge stood down as chairman amid “spurious” claims that the firm won Government contracts following his £1m (€1.46m) loan.

Losses at supermarket chain Morrisons added to the chilly mood and sent the FTSE 100 Index down 17.4 points to close at 5990.1.

Capita was one of the highest profile losers – down 14.75p to 455p – following Mr Aldridge’s decision to stand down.

But it was beaten to the top of the Footsie fallers board by Morrisons after it disappointed investors with a lack of detail in its three-year turnaround plan. Shares in the supermarket chain, which posted an 81% fall in annual profits, were down 6% or 12.5p to 197.5p.

It was tracked by Next – off 64p to 1662p – after the high street fashion chain said like-for-like sales in the current financial year were down nearly 9%.

Comments from Next that the competitive and economic environment was likely to remain tough over the coming 12 months put pressure on the rest of the retail sector and helped drag down shares in rival Marks & Spencer by 13p to 551p.

And property firms were hit by profit taking after they racked up strong gains yesterday when Chancellor Gordon Brown amended proposals for Real Estate Investment Trusts (REITs).

Land Securities, which advanced 13% in the previous session, weakened 80p to 2000p, while British Land faded 61p to 1239p and Hammerson dipped 48p to 1252p.

Shares in British Airways soared to the top of the leader board in early trading but closed the day flat at 360.75p as it unveiled plans to tackle a £1bn (€1.46bn) deficit in its pension fund.

But blighted catering group Compass was up 4% or 9.5p to 235.25p on the back of speculation that a key asset disposal was imminent.

And news that Anglo American intended to double its share buyback programme to $2bn (€1.6bn) helped to prevent the index from falling even further by lifting the miner’s stock 3% or 62p to 2078p.

Corporate news outside the top flight was led by hotels group De Vere, which revealed a takeover approach that reports said had come from private equity house Blackstone. Shares in the owner of the Grand hotel in Brighton rose 10% or 75p to 825p.

But shares in Monsoon were on the slide after talks ended between the fashion chain and chairman Peter Simon, who wanted to acquire the 24.6% stake that his family did not already own.

Monsoon also warned that falling sales would affect its annual results as its stock declined 6% or 23.5p to 369p.

The day’s biggest blue chip risers were Compass up 9.5p to 235.25p, Anglo American up 62p to 2078p, Legal & General 4p stronger at 146p and BHP Billiton up 22.5p to 991p.

The heaviest fallers were Morrisons off 12.5p to 197.5p, Carnival down 150p to 2850p, British Land 61p lower at 1239p and Land Securities down 80p to 2000p.

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