Business

FTSE 100 steady but Ocado shares hit by profit worries

Traders in London Image copyright AFP

(Close): Shares in online grocer Ocado dived nearly 14% after it said intense competition was hitting profit margins.

The fierce price war among supermarkets meant there had been "sustained" pressure on its margins "and there is nothing to suggest that this will change in the short term", it said.

Shares in the FTSE 250 firm sank 44p to 278p on the news.

That was despite Ocado reporting a 13.6% rise in gross retail sales to £286.4m in the 12 weeks to 7 August.

The benchmark FTSE 100 index closed down 35.27 points at 6665.63.

Shares in Associated British Foods fell a further 2.66%. Its shares had sunk 11% on Monday after it disclosed a £200m pension deficit and said sales at its Primark chain had been affected by unseasonable weather.

JD Sports shares rose 5% after it reported a 73% jump in half-year profits to £77.4m.

On the currency markets the pound slid after August's inflation figure came in weaker than expected. The CPS inflation rate was unchanged at 0.6%, whereas analysts had expected a small increase.

Against the dollar the pound slid 1.09% to $1.3190, while sterling dropped 1.16% against the euro to €1.1728.