FTSE endures nervous session

The London market failed to extend its three-day rally today after a nervous session for shares in the leisure and mining sectors.

The FTSE 100 Index dropped 45.9 points to 6386.6 by the close, ending last week’s run of gains, which had seen the Footsie add the most points in a week since before the summer’s credit crunch.

Pub groups were high up on the fallers board after downbeat broker notes on Mitchells & Butlers, while restaurant stocks dived on a profits warning from small-cap firm Clapham House.

All Bar One owner Mitchells & Butlers dropped 5%, or 30.5p, to 546.5p, after earnings forecast cuts from Merrill Lynch and Numis Securities.

Enterprise Inns followed, off 25p at 507p, with Costa owner Whitbread also feeling the heat, down 41p at 1400p.

A warning over 2008 and 2009 profits from Tootsies and Gourmet Burger Kitchen owner Clapham House reverberated through the restaurant sector, sparking fears of a widespread consumer spending slowdown.

Clapham House fell 40%, or 98.5p to 150p, while FTSE 250 firm Frankie & Benny’s owner Restaurant Group responded with a drop of 12% or 25.75p to 192.25p. Italian chain Prezzo also dipped 10%, or 6.25p to 53.75p.

Back in the top flight, mortgage bank Northern Rock was suffering more share price pain, down 9p at 109p. Reports suggested the Treasury was encouraging the crisis-hit bank to look at offers from rivals to preferred bidder Virgin.

Speculation that Deutsche Bank – one of three banks in discussions with Virgin to pay back the Bank of England loans – could exit an agreement with Virgin Group for the takeover of Northern Rock also hit the stock.

Heavily weighted miners meanwhile saw falls, with Rio Tinto down 197p at 5443p and Anglo American off 95p at 3191p.

But retailers were moving in the opposite direction, with DIY groups in particular benefiting from an upbeat note on Homebase parent Home Retail Group.

The firm, which also owns Argos, was ahead 3%, or 11p to 358p, while B&Q’s owner Kingfisher rose 6p to 158.3p.

Other retailers were also making gains to recover ground lost on Friday, with Next up 12p at 1752p, Marks & Spencer 5.5p higher at 589p and DSG International 1.1p stronger at 113.7p.

Tesco rose 8.75p to 487.75p, ahead of a trading update on Tuesday, while rival supermarkets chain Morrisons lifted 6.5p to 315p.

Elsewhere gaming group Rank soared 9% after it emerged Malaysian gambling group had built a 9.4% stake in the company. Rank shares lifted 8.75p to 109.25p.

Engineering group Morgan Crucible, however, dropped 23%, or 61.25p to 200.25p, after it warned of slowing sales.

The biggest Footsie risers were Kingfisher up 6p at 158.3p, Home Retail Group ahead 11p at 358p, Morrisons up 6.5p at 315p and Tesco ahead 8.75p at 487.75p.

The biggest fallers were Northern Rock down 9p at 109p, Mitchells & Butlers off 30.5p at 546.5p, Enterprise Inns down 25p at 507p and Rio Tinto off 197p at 5443p.