FTSE close: Sainsbury's fall; Budget impact
17.15 (close)
Eye on the market: Traders reacted to Budget news
Fears of a consumer spending clampdown hit Sainsbury's shares today after the supermarket giant reported a worse-than-expected slowdown in sales.
The UK's third biggest supermarket chain was the biggest FTSE 100 faller following news of a 1% rise in like-for-like sales during its fourth quarter - half that forecast by analysts and sharply down on the 3.6% jump seen in the previous three months.
London's wider FTSE 100 Index rose 33.2 points to close at 5795.9 in steadier trading, despite news from the Japanese government that this month's earthquake and tsunami would be the most expensive natural disaster in history.
In the US, stocks recovered from earlier declines seen after a US Federal Reserve decision to reject Bank of America's plan to raise its dividend in the second half of the year.
There was little reaction to the Chancellor's annual budget, which played out largely as expected.
Elsewhere, minutes revealed the Bank of England's monetary policy committee (MPC) held its voting position earlier this month - with six members backing no change to interest rates.
With no new members joining the vote to raise rates, the pound fell against most major currencies - with weakness compounded by downgrades to growth revealed in the Budget. Sterling dropped to 1.63 dollars and 1.15 euros.
Among stocks, shares in Sainsbury's fell more than 5% or 19p to 335.3p while rival Tesco dropped 1.2p to 380.2p and Morrisons dropped 1.9p to 274.4p.
Meanwhile, Marks & Spencer advanced 5p to 345.5p following speculation a major shareholder at Sainsbury's was keen to pursue a merger with the high street giant.
Qatar Holding, which has a 26% stake in Sainsbury's, declined to comment but is understood to be interested in backing a £13 billion-plus bid for M&S.
Mining stocks supported the market, following a profit-taking run in previous sessions triggered by the Japanese earthquake.
Kazakhmys moved 61p higher to 1431p.
Shares in broadcaster ITV were 4.4p lower at 80.4p after it was subject to a ratings downgrade from broker Jefferies.
Airport scanners and medical devices group Smiths rose 1% after it overcame contract delays in its detection business to post a 25% rise in half-year profits. With Smiths confident of meeting expectations for the full-year, shares rose 18p to 1325p.
And Rank Group added another 2% on top of the 14% rise seen yesterday after it announced a bigger-than-expected rebate from the taxman.
The Mecca bingo firm has been repaid £74.8 million in tax dating back to between 1973 and 1996 by HM Revenue & Customs and is also due to receive a further £79.5 million in interest later this month. Shares were 3.3p higher at 150.3p.
The biggest Footsie risers were Kazakhmys up 61p to 1431p, Essar Energy ahead 18.7p to 468.1p, Xstrata up 48p to 1422.5p and Eurasian Natural Resources up 31p to 929.5p.
The biggest Footsie fallers were Sainsbury's down 19p to 335.3p, ITV off 4.4p to 80.4p, Aviva down 14.2p to 432.7p and International Consolidated Airlines Group down 5.9p to 216p.
15.10: Mining stocks are offering some support to the market today, following a profit-taking run in previous sessions triggered by the Japanese earthquake.
Eurasian Natural Resources is 19.5p higher at 918p, while Xstrata added 29.5p to 1404p and copper giant Kazakhmys was up 23p at 1,393p.
Marks & Spencer rose 3.3p to 343.8p following speculation a major shareholder at Sainsbury's was keen to pursue a merger with the high street giant.
Qatar Holding, which has a 26% stake in Sainsbury's, declined to comment but is understood to be interested in backing a £13bn-plus bid for M&S. Sainsbury is 22.5p down at 331.8p.
The Footsie is 10 points lower at 5,752.7.
14.30:
Financial markets have remained relatively calm in the wake of the Budget. We have a full round-up here.
The FTSE 100 has fallen back into the red and is trading down 17.9 points at 5,744.8.
The Dow is down 24.6 points at 11,994 after it emerged that new home sales in the US fell in February.
11.30:
We have an update on Sainsbury's disappointing sales figures which have prompted a share slide across the supermarket sector.
Sainsbury itself is down 6% or 19.6p at 334.7p. Tesco is off 5.4p at 373.6p and Morrison has dropped 2.9p to 273.4p.
Upmarket online grocer Ocado is also trading down 3.9p at 209.4p.
Futures trading indicates a mildly positive open on the Dow Jones later. US investors are anticipating a small rise in new home sales when data is released later.
The FTSE 100 is up 34.5 points at 5,797.2.
11.10:
The Footsie has reversed those early falls thanks to news which could delay painful interest rate rises.
The FTSE 100 is now 34.63 points higher at 5797.3. Shares jumped after the minutes from the latest rate-setting meeting at the Bank of England were released.
They showed no change in voting patterns from the month before, despite a slew of bad news on inflation. The nine-strong committee again voted six to three to keep rates on hold.
Consensus thinking is that the Bank will raise rates by the mid-point of the year, but the refusal of members to budge has markets banking on a continuation of the benign monetary policy.
09.25:
The FTSE 100 fell today ahead of the Budget, as a worrying slowdown at Sainsbury's hurt the supermarkets and ITV suffered a downgrade.
The Footsie was 23.38 points lower at 5746.2 after Sainsbury's sent a jolt through shares in the supermarket sector today after it revealed a bigger-than-expected slowdown in sales growth.
The 1% rise in quarterly like-for-like sales was lower than market forecasts and sharply down on the 3.6% jump seen in the previous three months.
Shares in Sainsbury's fell 5% or 16.25p to 338.05p while rival Tesco slumped 9.1p to 369.9p as further evidence of the current squeeze on consumer spending caused the FTSE 100 Index to fall 15 points to 5747.9.
The disappointing performance by one of its biggest advertising customers added to the pressure on broadcaster ITV after it was the subject of a ratings downgrade from broker Jefferies. Shares were 3.2p lower at 81.5p.
On a brighter note, airport scanners and medical devices group Smiths rose 1% after it overcame contract delays in its detection business to post a 25% rise in half-year profits. With Smiths confident of meeting expectations for the full-year, shares rose 14.5p to 1321.5p.
And Rank Group added another 4% on top of the 14% rise seen yesterday after it announced a bigger-than-expected rebate from the taxman.
The Mecca bingo firm has been repaid £74.8m in tax dating back to between 1973 and 1996 by HM Revenue & Customs and is also due to receive a further £79.5m in interest later this month. Shares were 6.75p higher at 153.75p.
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