The FTSE 100 index of leading shares lost 13.3 points, or 0.2% to 5416.4, paced by Tesco, after the nation's biggest retailer said sales growth would slow.
J Sainsbury and William Morrison supermarkets also slid but Tesco slipped to its lowest level in 19 months, falling 13p, or 4%, to 313.5p.
The UK's biggest supermarket chain today said profit rose 18% in the first half but UK sales growth will be at its slowest pace in two years in the second half of 2005 as the industry has become more competitive.
Sainsbury, the third-largest supermarket operator, dropped 8p, or 2.8%, to 275.5p while William Morrison, the fourth-biggest food retailer, slipped 4.25p, or 2.3% percent, to 178p.
BAA also dropped 3p, or 0.5%, to 617.5p as the world's largest airfield operator cut its forecast for passenger traffic after bombings in London and a strike at Heathrow.
Anglo American climbed 37p or 2.4%, to £16.01 after analysts raised the recommendation on the shares to “buy'” from “hold” because of rising profitability and sales growth.
BOC Group, Europe's second-largest maker of industrial gases, fell 23p, or 2%, to 1,134p after analysts lowered their recommendation on the shares to “hold” from “buy.”
Cairn Energy, the UK-based oil exploration and production company, advanced 95p, or 5%, to £20.09. The company said first-half profit rose 2% to £24m as production gains in India and record oil prices boosted sales. It also said it might be able to boost production more than fivefold by 2008.
Centrica, the country's biggest energy supplier, fell 1.25p, or 0.5%, to 252.25p as the company has bought a 40% stake it doesn't already own in the Humber power plant from Total SA, to try to generate more of its own electricity and avoid Britain's wholesale power market.
In the US, stocks have climbed as Goldman Sachs reported better than expected profit and oil prices fell below $66 a barrel.
The Dow Jones Industrial Average has so far gained 42.36 points, or 0.4%, to 10,599.99 in morning trading.
Goldman Sachs, Wall Street's biggest trading firm, gained $1.55 to $119.83. The gain was spurred by a jump in revenue from buying and selling bonds, commodities and stocks.
Crude oil today fell 3% to $65.40 a barrel in New York compared with previous levels as it had previously been though Hurricane Rita would hamper refining and production in Texas and Louisiana. Futures, which reached a record $70.85 last month, surged 7% yesterday amid storm fears.
Procter & Gamble, the largest US household-products manufacturer, added $0.74 to $56.30 as the company said fiscal first-quarter per-share profit will still be $0.75 to $0.76, even after Katrina disrupted its Folgers and Millstone coffee businesses.
Shares of Rohm & Haas, the No.1 producer of acrylics used in paints and plastics, gained $1.42 to $41.52. The company said it is raising prices to recover a surge in energy and raw- material costs after Katrina.
But shares in US Steel Corp retreated on disappointing forecasts. The biggest US steel manufacturer slumped $2.25 to $43. The company said third-quarter profit will be below the “current range” of analysts estimates due to increasing natural-gas and scrap costs.
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