Footsie loses early gains
Strong gains for the FTSE 100 Index were eroded late in the session today as investors talked down the chances of a takeover of Sainsbury’s.
The supermarket chain had led the way for blue-chip companies for much of the day but slipped back as the Footsie closed just 7 points higher at 4545.
Another reason for the late sell-off came from New York where producer prices fell in August when most experts had predicted a modest rise.
Paul Webb, a trader at deal4free.com, said: “Although the news removes some of the earlier concerns over inflation, it has simultaneously raised a degree of alarm over the general state of the US economic recovery.”
Sainsbury’s ended the day 6p higher at 283p as talk of a possible takeover continued to tempt investors off the sidelines.
Speculation of an imminent bid has gathered pace after Sainsbury’s lost ground over the past 12 months to rivals Asda and Tesco due to stiff price competition.
Technology stocks were also doing their best to prop up the top flight after Nokia unexpectedly increased its third-quarter earnings forecast. Sage Group was a chief beneficiary, up 3% or 5.25p to 169.75p.
In terms of corporate news, United Utilities lifted 1.5p to 549p after a new deal with Welsh Water was unveiled.
Airports operator BAA slipped 2p to 561.5p as it reported its busiest August on record after 14.2 million passengers used its seven sites during the month.
But the heaviest faller was catering group Compass, which slipped 8.75p to 230.5p as it continued to feel the impact of yesterday’s warning on full-year profits.
Outside the top flight, Punch Taverns cheered 2% or 11p to 513p after announcing a £335 million deal to snap up more than 1,000 community pubs.
Signs of improved trading at nightclub group Luminar enabled the stock to brighten by nearly 9% or 35.75p to 444.75p. In a trading update Luminar said like-for-like sales for August were down 2.2%, compared with 4.1% in July.
Kitchen equipment group Aga Foodservice was upbeat, rising 6p to 234p, after serving up an 8% rise in half-year profits and forecasting a “significant boost” from a new product.
Inter Link Foods rose nearly 6% – up 27p to 502.5p – after reporting a 15% lift in like-for-like sales in the last four months and unveiling a major board reshuffle.
However, Premier Foods weakened 2p to 229p after maiden half-year results showed a 29% rise in operating profits to £31.2 million.
Shares in Walkabout owner Regent Inns fell 5% but then recovered to stand unchanged at 37p, as it announced its second boardroom shake-up this year after parting company with chief executive Stephen Haupt.
The day’s biggest risers were BSkyB, ahead 17p to 514p, Sage Group up 5.25p to 169.75p, InterContinental Hotels lifting 14.5p to 604.5p and British Land advancing 18p to 767p.
Biggest fallers were Compass Group, down 8.75p to 230.5p, AstraZeneca off 60p to 2450p, Schroders losing 12.5p to 638p and Severn Trent declining 16p to 843p.
