FTSE in downbeat form

Retail stalwarts Sainsbury’s and Woolworths lost ground today after failing to impress with first quarter trading updates.

The rest of the market was in downbeat mood, shedding all of yesterday’s gains after investors took fright at losses of more than 100 points for the Dow Jones Industrial Average last night. Wall Street was lower amid renewed fears that US banks may be forced to raise additional capital.

The FTSE 100 Index, which rose yesterday on hopes that policymakers will not fight inflation with higher interest rates, lost more than 1% by mid-morning, down 80.3 points at 5781.6.

Sainsbury’s fell 2%, even though the supermarket chain reported a 3.4% rise in like-for-like sales – broadly in line with City forecasts. The figure was weaker than the 4.1% reported previously, causing shares to fall 8.25p to 327.5p.

Housebuilders were back under pressure after Goldman Sachs said the market was only at the start of a deep downturn, which could last up to three years.

Goldman’s comments and sell ratings on a number of stocks meant Persimmon fell 7% or 30.5p to 382.5p. The Charles Church owner is due to drop out of the FTSE 100 Index when a top flight reshuffle takes place on Friday.

Other casualties included Redrow, which fell 14% or 22.5p to 144.5p, and Taylor Wimpey following a drop of 10p to 63.75p. Barratt Developments, which has the borne the brunt of the sector’s stock market troubles, slid 9.25p to 81.25p.

Elsewhere, Woolworths shares were down 6% after it revealed a 2.2% fall in high street sales and said margins were under pressure after it sold a greater proportion of electronics goods. With the company facing uncertainty because of the departure of chief executive Trevor Bish-Jones, shares fell 0.57p to 9.21p.