FTSE close: Sainsbury down, Michael Page up

By Adrian Lowery
Updated: 12:18 EDT, 7 October 2009

The London market took a breather today after a heady couple of days of gains, with energy stocks weighing on the Footsie.

The FTSE 100 index just about held its own through the day but late pressure from across the Atlantic meant it closed 29 points down at 5,108.9.

On Wall Street the Dow Jones was 40.7 points down on 9,690.5.

The FTSE 100 has risen 48% since hitting a floor in March as optimism on the global economic recovery has grown. Some analysts are predicting that the rally still has some fuel to push higher after raking in hefty gains in the third quarter of the year.

'With the FTSE 100 continuing to trade above the 5,000 mark, it seems that investors are willing to let this latest bout of recovery continue before hitting the sell button,' said Anthony Grech, a market strategist at IG Index.

A downbeat note from Royal Bank of Scotland on the prospect of lower profits for European oil and gas firms this year and next depressed many stocks in the sector.

Energy stocks took the most points off the index: heavyweight BP was 8.7p lighter at 541.5p, Tullow Oil shed 39p to 1,170p and Cairn Energy was off 60p to 2,768p. Royal Dutch Shell was 27p down at 1723p.

A sales update from J Sainsbury received a lukewarm response as shares in the supermarket chain opened more than 3% lower.

The retailer reported like-for-like sales growth of 5.4% in the second quarter, slightly lower than market forecasts and down on the inflation-driven rise of 7.8% seen in the first quarter.

Sainsbury's shares slipped 10.6p to 312.3p.

The rest of the supermarket sector was under pressure, with Morrisons down 2.2p at 272.9p and Tesco off 8.8p at 381.9p, despite delivering a solid half-year trading update yesterday.

Meanwhile blue chip insurer Admiral and media and advertising firm WPP both turned ex-dividend, leaving the former at the top of the fallers' board. Shares in the duo lost 33.9p to 1,121p and 3.95p to 542.5p respectively.

Kingfisher was among the top blue-chip risers, with a 4p gain to 220p, after UBS upgraded its recommendation on Europe's largest home improvement retailer to 'buy' from 'neutral'.

Morgan Stanley also upped its stance on the stock, to 'equal-weight' from 'underweight'. 'It has strong margin momentum, operational focus and cash flow,' analysts at UBS said in a note.

The risers board was led by insurer Aviva after investors welcomed its plans for a US listing, helping shares move almost 4% higher or 17.1p to 467.5p.

It was closely followed by InterContinental Hotels after Citi raised its rating on the Holiday Inn chain to buy and said the stock looked cheap compared with US peers. Shares were up by more than 3% or 26.5p to 825.5p.

One of the biggest gains in the FTSE 250 index came from recruitment firm Michael Page International following its announcement of third quarter operating profits, against expectations for a loss. Shares were 3% or 13.7p higher at 343.p.

Thorntons shares were also stronger, up 3p to 121p, after the chocolate retailer achieved first quarter sales growth of 2.3% and said it was well placed ahead of the Christmas trading period.

Elsewhere gaming website Sportingbet added 5p to 73p or 8% after a 28% hike in underlying profits despite weaker UK revenues. Investors were cheered by the decent results and a return to dividend payments.