FTSE dragged down by property firms

Property firms dragged on the London market today after a cautious update from Land Securities.

The group topped the fallers’ board with a decline of 3%, or 62p to 1956p, as it confirmed that growth in the investment property market was slowing, despite posting a solid set of quarterly results.

The FTSE 100 Index held firm, down 0.7 points at 6567.9 by mid morning, as updates from Sainsbury’s and DSG International also failed to cheer investors.

The news from Land Securities sent ripples through the property sector, with British Land falling 24p to 1466p and Slough Estates off 9.5p at 759p.

Catering group Compass was travelling in the opposite direction as it posted a 42% jump in first half pre-tax profits on the back of recent cost cutting measures and strong growth in its international business. The stock led the Footsie risers with a gain of 10.25p to 370.5p.

DSG International was another heavy faller, even though the Currys owner reassured with a solid trading update. Continued worries about European trading, particularly in Italy, overshadowed the performance as shares slipped 2.1p to 173.6p.

The mood among other retailers was also downbeat, with B&Q owner Kingfisher down 2.5p at 263.25p.

Sainsbury’s slipped 1p to 557p, even though it published full-year profits at the top end of expectations and announced new sales growth targets. The fall in the share price is likely to reflect the fact that Sainsbury’s has ruled out the sale of its property portfolio, which is worth around £8.6 billion.

Among the risers, Enterprise Inns and Punch Taverns gained for a second successive session amid hopes for a property estate restructuring. Shares were 5.5p and 1p higher at 775p and 1385p respectively.

Meanwhile, private equity group 3i continued to benefit from yesterday’s news that it intends to float its 3i Quoted Private Equity business – its arm which invests in small and medium sized listed companies. The stock was up 23p at 1219p.