FTSE slips back from 13-month high

Barclays and Sainsbury’s grabbed the spotlight in a lacklustre session today after Qatari investors cashed in £1.3bn (€1.4bn) of share options in the bank.

The sale sent Barclays almost 5% or 18.3p lower to 363.75p, but shares in the UK’s third biggest grocer bounced 17.7p to 347.8p on talk the Qataris would use the funds to increase their 26% stake in the company.

The wider FTSE 100 Index however lost 38.1 points to 5243.4 as many traders chose to book profits after Monday’s 1.8% advance to a new 13-month high.

Stocks also slid on Wall Street in early trading as more strong corporate figures from the likes of Apple, Caterpillar and Pfizer were offset by lower than expected housing starts in September.

In London, technology firm Autonomy was the Footsie’s leading faller, dropping almost 9% or 138p to 1457p, after its third quarter update disappointed investors with shrinking profit margins and broker Panmure Gordon cut its target price on the stock.

But Penguin-to-Financial Times publishing group Pearson was second only to Sainsbury’s on the risers board.

The stock added 4% or 36.5p to 858.5p after raising earnings guidance for the full year. Its education business is performing ahead of expectations despite “challenging conditions” in its US school publishing arm. Fellow media group Reed Elsevier cheered 6.3p to 466.3p.

Meanwhile the revival of bid speculation over Sainsbury’s also helped its rivals climb the leader board. Morrisons and Tesco were 0.9p better at 273.1p and 4.35p up at 383.5p respectively.

Dairy Milk maker Cadbury – another firm in the takeover spotlight – firmed 5.5p to 798.5p ahead of tomorrow’s third quarter trading update.

In the FTSE 250 Index, shares in Greggs were off almost 4%, or 17.3p to 448p, after it announced plans for a major expansion drive. The high street baker wants 600 new shops, but warned this will cost an additional £60m (€65m) or more in capital expenditure.

Greggs shares were also unsettled by a trading update which showed a slowing in sales growth in recent weeks.

Party Poker owner PartyGaming was the heaviest faller in the second tier after the casino firm’s founder, Anurag Dikshit, announced he was selling two-thirds of his 28% stake to institutional investors.

This will increase the liquidity of the stock, but investors were unsettled by the move and drove shares 15% or 44.4p lower at 240.1p.

Car dealership Inchcape headed the other way, gaining 2.3p to 35.15p or 7%, as the British government’s cash-for-bangers scrappage scheme put the group on course for results “significantly ahead” of expectations.

The rest of the sector benefited from the update, with Pendragon ahead half a penny at 34.25p and Lookers up 2.75p at 66p.

The biggest Footsie risers were Sainsbury’s up 17.7p at 347.8p, Pearson ahead 36.5p at 858.5p, Man Group up 7p at 367p and Diageo up 15p at 988p.

The biggest Footsie fallers were Autonomy down 138p at 1457p, Barclays off 18.3p at 363.75p, Wolseley down 50p at 1414p and Cairn Energy off 82p at 2915p.