The fallout from Tesco's profit warning continues, with supermarket shares under pressure again.
With markets edging lower again, one of the day's biggest fallers so far is J Sainsbury, down 5.9p at 252.1p after it unveiled price cuts across 12,000 products. The latest shots in the supermarket price war, in the wake of Tesco's travails, have unnerved investors in the sector.
Following negative notes from HSBC and Deutsche Bank on Sainsbury ahead of an expected 3% fall in sales when new chief executive Mike Coupe unveils its latest results, Barclays has cut its price target from 365p to 300p but maintained its overweight rating.
Meanwhile Morrisons is down 2.1p to 172p while Tesco is down 1p at 191.5p.
Sports Direct International, which has taken an £43m punt on Tesco shares recovering, has lost 15.5p to 622p, amid criticism about whether it is a good use of company cash.
Overall the FTSE 100 has fallen 11.66 points to 6628.05, with a combination of concerns. It is on track for its biggest weekly fall since June 2013, on worries about rising interest rates in the UK and US, a spate of profit warnings (Tesco was not alone), and fears of slowing growth in China and the eurozone.
On top of that were geopolitical tensions - the repercussions from US air strikes in Syria, Russia retaliating for sanctions prompted by its actions in Ukraine among them.
Andy McLevey at Interactive Investor said:
Traders in London took their cue from Wall Street and Asia where ongoing geopolitical concerns, a slowdown in China, the end of Fed QE and interest rate fears caused the biggest one-day losses in almost two months. Higher interest rates could derail the economic recovery and heap further misery on oil companies and mining stocks. With little by way of company news to latch on to and the weekend looming, traders are keeping their powder dry. There's real concern that this could be the beginning of a long overdue correction.
But mining shares, a volatile market all week on the Chinese outlook, have edged higher again. Fresnillo is up 14.5p at 762.5p and Randgold Resources has risen 65p to £43.14 as gold edged higher as investors sought havens for their cash. But the strength of the dollar has partly undermined commodities priced in the US currency.
The morning has brought two more profit warnings. Banknote printer De La Rue is down 27% at 549.5p after saying profits would be below expectations both this year and next, and it could cut its full year dividend.
Waste management group Shanks has slid nearly 15% to 87.50p as it said full year results would be 15% below previous estimates, as trading conditions worsened in Belgium, Luxembourg and the Netherlands. Investec analyst John Lawson issued a hold note saying:
News yesterday that Van Gansewinkel, the market leader, has been put up for sale (according to local press) may, in time, be seen as the turning point for the sector, as that company is widely blamed for the current turmoil in the solid waste industry in the Netherlands. Shanks has been one of the many waste businesses to have suffered in a very competitive industry. Whilst forecast are coming down again, there are glimmers of hope - more detail next week [at its capital markets day]? -) and cost/cash management remains strong.
