WEDNESDAY MARKET CLOSE: Market rout continues as PMIs miss

Traders clobbered supermarket shares after Sainsbury's became the latest to cut its sales forecasts. Picture: Getty

Traders clobbered supermarket shares after Sainsbury's became the latest to cut its sales forecasts. Picture: Getty

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Stocks were hit by a raft of disappointing economic and corporate data, wiping a further 1 per cent off the FTSE 100 as the retreat from recent highs continued unabated.

The index dropped by 65.2 points to 6,557.52 as PMI manufacturing readings from the UK, US and Germany all came in below expectations.

Tony Cross, market analyst at Trustnet Direct, said: “To have all three of these readings turn sour at a time when investor confidence is on a knife-edge is paving the way for some turbulence in equity markets.”

Meanwhile traders clobbered supermarket shares again after Sainsbury’s became the latest grocer to cut its sales forecasts. Its shares slumped 7 per cent to a six-year low, and have now fallen more than 40 per cent since November – despite the fact that its figures were not quite as bad as brokers had feared. It was off 17.5p at 234p, while Tesco fell 6p to 180.2p as the Financial Conduct Authority launched a probe into the grocery chain’s recent £250 million overstatement of profits.

Morrisons shares were down 5 per cent or 8.4p to 159.9p amid fears that it will be the biggest casualty if its larger rivals decide to step up the sector’s ongoing price war.

But broker upgrade for Royal Mail helped its shares recover following the recent heavy losses seen caused by profit warnings from rivals TNT Express and UK Mail.

The shares were 2 per cent higher – up 7.5p to 399.7p – as UBS removed its “sell” rating on the stock saying costs and risks were now factored in.

In other corporate news, shares in St Modwen Properties rose by 2 per cent after the regeneration specialist said full-year profits will be materially stronger than the figure reported for 2013. Shares lifted 4.8p to 371.4p.

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