Blue-chips closed broadly flat, shrugging off a fall for supermarket giant Morrisons shares after a report that Scotland’s third-biggest food retailer was close to selling 160 M-Local convenience stores.
The grocer declined to comment on the report, dismissed by some analysts, that it was looking to call time on its belated venture into smaller convenience sites. Its shares closed down 2.1p to 175.7p, and Shore Capital analyst Clive Black said that “the odds were stacked against success” for the group in the convenience sector, coming into it later than rivals and contending with “poorly acquired and inferior sites”.
The wider FTSE 100 struggled for direction, ending the day 0.43 points lower at 6,550.3 after a tough time for world markets last week as the devaluation of China’s yuan caused alarm and sent stocks into the red.
Elsewhere, attention was focused on the latest sign of a coming hike in interest rates as monetary policy committee member Kristin Forbes warned of the danger that the UK could “linger too long in the sun” of low rates.
She said waiting too long for an increase would risk undermining the recovery. Despite the hawkish tone of the remarks, sterling was little changed against the US dollar.
FTSE 250 housebuilder Bovis Homes fell 38p or 3.2 per cent to 1,163p despite reporting a 9 per cent rise in half-year pre-tax profits to £53.8 million. Analysts are concerned at the level of investor returns and Peel Hunt’s Clyde Lewis said the group’s return on equity was at a “shortfall”, compared to its peers.
He added: “Unfortunately, on our forecasts the gap is not being closed much in the next few years.”
Shipping services firm Clarkson fell 7 per cent, or 195p, to 2,555p after unveiling a 23 per cent slump in half-year profits.