FALLING car sales had a knock-on effect on dealers yesterday, as traders speculated that a drop in demand could take the groups by surprise.
Shares in both Inchcape and Pendragon came under pressure after CSFB flagged a deterioration in car sales in summer in both Europe and America. The broker cut its rating on the car manufacturing sector, but UK investors read across to the retail network. The falls come amid growing concern that consumer spending may decline in coming months. Some traders talked of the possibility that the dealers may have failed to anticipate falling demand. Inchcape gave up 68p at £15.97 while Pendragon lost 9¾p at 295p.
SSL International was in the spotlight, up 11p at 288¼p as talk of an imminent takeover bid for the maker of Durex condoms and Scholl footwear excited traders. In June, SSL agreed a £173 million sale of its surgical gloves business in a management buyout. The FTSE 250 ended the day 37.0 points up at 6,296.1.
Somerfield was a beneficiary of Big Food Group’s acknowledgement of a 110p bid for BFG. The middle-tier retailer rose by 2½p to 134p while Big Food Group dominated the session, rising 10½p to 102¾p.
Shares in Computacenter jumped 10p to 352p as volumes were swollen by two block trades. Nearly 2.2 million shares changed hands, some four times the normal intraday volume, as two lines of one million shares went through the system.
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House of Fraser edged up 2p to 115p as analysts took in the opening of its new department store in Croydon. The launch marks a return to new openings for the group after a dearth of activity. Meanwhile HMV Group rose 3½p to 222p as it showed off its new Waterstone’s bookstore in London’s Oxford Street.
A $500 million maintenance contract with Air New Zealand led Rolls-Royce up 4½p to 251p. Hopes of upbeat results from Burren Energy next week gave the oil group’s shares a boost. The company, whose shares were up 10p to 370p, is due to report first-half figures on Monday.
Sanctuary Group edged up ¾p to 46p on talk of an active second half for the music group. The period ends at the end of this month.
Regent Inns closed unchanged at 32½p despite Cantor Fitzgerald declaring a 0.5 per cent increase in its stake. It now owns 12 per cent of the bars operator.