The FTSE 100 hit a three-month low as investors belatedly reacted to the political crisis in Washington, taking money off the table as the US government shutdown dragged through its second day.
Brenda Kelly, senior market strategist at IG, said: “With quarter-end and continuing uncertainty about the longevity of the US government shutdown, investors have resolved to take some profits.”
With no signs of an agreement on the US budget, the FTSE 100 closed down 22.51 points at 6,437.5, having spent much of the session lower still.
Tumbling half-year profits at Tesco sparked declines across the supermarket sector, the culprit itself had recovered most of its losses by the close. Shares closed just 1.1p lower at 358p despite underlying sales declining in the UK and every one of its international markets.
Rival Sainsbury’s painted a brighter picture with a 2 per cent rise in like-for-like sales, but its shares also dropped, down 4.9p to 385.3p. Morrisons followed its competitors into the red, down 5p to 274.8p as its stock also turned ex-dividend.
Quality and safety solutions provider Intertek and property group British Land were also hit by the ex-divi factor, down 88p to 3,266p and 4p to 577p respectively.
But Barclays shares were given a boost by analysts at Societe Generale, who upgraded their rating to “buy”, albeit with a slightly lower target price. The shares added 1 per cent to 272.5p.
National Grid was the biggest top flight riser, up 12p at 743p as traders looked to defensive plays.
Domino’s Pizza was one of the biggest gainers in the second tier after it reported 4 per cent growth in UK like-for-like sales growth over the summer quarter. Shares rose nearly 4 per cent or 21.5p to 610.5p.