Turbulence in the airline sector and a number of heavyweights going ex-dividend ensured the FTSE 100 was flying a little lower.
With sentiment also affected by the World Bank’s downgrade to global growth forecasts, the index was off 34.68 points at 6,838.87.
Jasper Lawler, market analyst at CMC, said: “The airlines including IAG were weighing heavy on the FTSE after taking a double blow from Lufthansa issuing a profit warning and Emirates cancelling an order for 70 Airbus A350 planes.”
British Airways owner IAG fell 3 per cent to 400p while EasyJet was down by 4 per cent at 1,530p after the downgrade by their German rival highlighted falling fares on European and American routes.
Rolls Royce was also down heavily as it lost out on the engines contract from Emirates. Shares fell more than 5 per cent, or 59p, to 1,017p after Rolls said this would reduce its order book by 3.5 per cent or £2.6 billion, although it remains hopeful that the delivery slots will be taken by other airlines.
On the risers’ board, supermarket chain Sainsbury’s climbed 1 per cent despite reporting a slight fall in like-for-like sales in the 12 weeks to 7 June. This was the second quarterly decline in a row but shares rose 3.2p to 333p on relief that the figure was in line with City expectations.
Shore Capital, which has a “hold” rating on Sainsbury’s, said the outcome was “relatively sound”, particularly when compared with its rivals.
Rival Tesco edged 0.4p lower to 295p, while Morrisons was 1p higher at 195.5p.
Former takeover target AstraZeneca was ahead after announcing it would present a string of data on its drugs at a major US diabetes conference. The group, which recently shrugged off the advances of Pfizer, rose 52p to 4,400p.