FTSE falls

Profit taking and weaker metal prices caused the mining sector to drag on the London market today, while fading hopes of a bid battle for supermarket giant Sainsbury did little to cheer investors.

The FTSE 100 Index closed down 13.8 points at 6419.5, even as other retailers benefited from positive outlook reviews.

Metal prices softened after the Chinese central bank took steps to cool the country’s economic growth, sparking fears over future demand for base metals.

Vedanta Resources led the sector losses, off 18p at 1286p, with Rio Tinto down 35p at 2799p and Anglo American losing 32p to close at 2538p.

Weaker oil prices also took their toll on the blue-chip index as the continued mild weather in the US saw stocks rising amid the reduced demand.

BG Group was down 10.5p at 710.5p, Cairn Energy fell 21p to 1592p, while Royal Dutch Shell lost 15p to 1685p and BP closed 2p lower at 535p.

The Footsie’s performance was also hit as the prospect of a private equity bid battle for Sainsbury receded, with reports emerging earlier in the day that Cinven had dropped plans to form a rival team to bid for the group. Sainsbury shares were off 4.5p at 504p.

However, there was better news elsewhere in the retail sector with B&Q owner Kingfisher leading the Footsie risers after a positive note from HSBC. Shares were up more than 3%, or 8.75p at 259.75p.

Next also gained ground, up 37p at 2093p, after Goldman Sachs upped its rating and said it expected an improvement in like-for-like sales. Tesco was also higher, up 2.25p at 445p and Curry’s owner DSG International was 0.75p ahead at 176.25p.

Brewers made their way on to the fallers’ board as they gave back gains following speculation over sector consolidation in the previous session. Scottish & Newcastle was off 11.5p at 567.5p, while SABMiller fell 12p to 1186p.

Reed Elsevier was 1% lower as some of the froth came out of its shares after yesterday’s pledge to sell the publishing company’s educational arm and give cash back to shareholders. The stock was 8.5p lower at 636p.

Royal Bank of Scotland lifted 16p to 2117p ahead of its results on March 1, with analysts expecting the group to post pre-tax profits of £9.16 billion for 2006.

Compass shares were also up after the catering group said it was trading “marginally ahead of expectations”. Shares were 2.75p higher at 312p.

Elsewhere, bid speculation also helped NHS software company iSoft begin its recovery after fears earlier in the week that talks had failed between potential buyer, US drugs distribution firm McKeeson, and Computer Science Corporation, which subcontracts work to iSoft.

Shares were up more than 10%, or 4.75p, to 49.75p today after it emerged Australian software firm IBA Health was considering making an offer for iSoft.

The biggest Footsie risers were Kingfisher up 8.75p at 259.75p, Rolls-Royce up 9.75p at 525.25p, Next ahead 37p at 2093p and Experian Group up 10p at 612p.

The biggest Footsie fallers were Scottish & Newcastle off 11.5p at 567.5p, Johnson Matthey down 32p at 1607p, BG Group down 10.5p at 710.5p and Vedanta Resources off 18p at 1286p.