FTSE on the slide

A surprise fundraising by Sainsbury’s in order to quicken the pace of its expansion caused shares in the supermarket to go into reverse today.

Investors were sitting on heavy losses, down almost 7% as a result of the dilutive impact of new shares being issued under the £445m (€522.43m) exercise.

The rest of the market was in negative territory after miners came under fresh pressure. By mid-morning, the FTSE 100 Index stood 43.2 points lower at 4285.4.

A further retreat in commodity prices meant Vedanta Resources shed 8%, or 117p to 1377p and Kazakhmys slid 50p to 632.5p. They were joined at the top of the risers board by Sainsbury’s, which fell 21.75p to 310p.

This was despite another impressive recent trading performance, with like-for-like sales up 7.8% for the first quarter of its financial year.

The risers board was led by telecoms group BT, which extended its positive run into a second session following an upgrade from broker Morgan Stanley yesterday.

BT shares have languished at a record low in recent weeks, but recovered another 2.9p to 105.4p today. Mobile phone giant Vodafone made it a positive session for the telecoms sector after shares rose 2.2p to 116.9p.

Outside the top flight, engineering consultancy WS Atkins rose 2% or 11p to 550p after it announced a 12% rise in annual profits and said it was well placed to ride out the recession.

Shares in National Express shed 1% or 3.75p to 307.25p, even though it said it had been given extra breathing space on its £1.2bn (€1.4bn) debt pile until the end of this year.

The group faced reverting to tighter lending terms from next month, under which its net debt is pegged at three and a half times underlying earnings.