London open: Market unsettled as Sainbury's disappoints

23rd Mar 2011 09:00

Budget days are normally quiet, but supermarket giant J Sainsbury's slightly disappointing trading update has unsettled the mood. Caution ahead of today's speech by the Chancellor will also be keeping some on the sidelines. Supermarket giant Sainsbury's grew like for like sales by slightly less than expected during the fourth quarter following a widely-predicted slowdown since Christmas. Like for like sales excluding fuel but including VAT rose 1% in the 10 weeks to 19 March compared with 3.6% in the third quarter and the 1.5% predicted by analysts at Nomura. Britain's number three grocer increased like for like sales by 4.2% including fuel, giving a full-year increase of 4.7%. Total sales for the quarter increased 6.8% and 3.5% without fuel. "We expect the consumer environment to remain tough, with our customers facing fuel price inflation, uncertain employment prospects and government spending cuts," King said. Tesco and Wm Morrison are lower in sympathy.Rising oil prices have lifted the oil sector, with Cairn also strong on hopes that a deal can be struck over its Rajasthan assets while BP has sold another US asset.Property giant Hammerson has splashed out over £200m to snap up the Centrale shopping centre in Croydon plus five others as it executes its plan to invest into areas with potential. Medical devices and airport scanners maker Smiths Group has reported a healthy increase in half-year profits, up around a quarter. The company grew profit before tax for the six months to 29 January to £189m from £148m a year ago, and headline profit, which excludes lots of one-off items, by 25% to £224m. Underlying profits more than doubled last year at Kazakhstan-based mining giant ENRC with this year also expected to see production at "at effectively full available capacity", though it says rising costs are a worry. Record production in 2010 and higher prices in 2010 lifted revenue by 72% to $6.6bn, with like-for-like sales up 62%. Oil explorer Soco International remains on target for first oil from the Te Giac Trang (TGT) field in Vietnam, but profits fell sharply in 2010 and no new reserves were added during the year. Profit after tax sank to $12.3m from $34.8m, mainly due to the fact that entitlement barrels linked to Soco's cost carry of Petrovietnam on the 9-2 Block had been fully recouped by the end of 2009. Cake and bread maker Finsbury Food reported a 3% rise in half year pre-tax profit helped by a strong performance from its Bread and 'Free From' and a return to profit at its cake division. Pre-tax profit rose to £1.9m for the six months ended 1 January 2011 from £1.8m before. Group revenue increased to £87.8m from £82.9m.