Greggs end week a touch softer

Aug 16 2008 by Peter McCusker, The Journal

FRIDAY ended a volatile week for UK shares with the FTSE 100 Index closing 0.8% lower.

Since last Friday’s close, the FTSE 100 Index has shed 34 points as investors have had plenty of economic news to digest. The commodity rally continued to unwind on Friday which may serve to reduce inflation. Consequently, economists expect UK interest rates to start coming down some time next year.

Despite slumping gold prices, which fell below $800 a troy ounce for the first time this year, gold miner China Goldmines’ share price remained unchanged. The Newcastle-based company has set a goal of reaching large-scale production by 2011.

Meanwhile, Southern Cross Healthcare Group saw its shares storm ahead over 6% to 128p. Other local gainers included the housebuilders which experienced a shy rally yesterday after having fallen following some dull trading updates. Barratt Developments stood 5.2% healthier despite a broker downgrade while Bellway’s shares also managed to edge forward. However, shares in property developer Grainger closed in the red.

Elsewhere, Greggs’s shares ended 2.2% softer. Shares in the bakery chain have fallen from £47 in May to around £38 at present, representing a fall of 19%. The company, which is now worth just over £400m, has seen its costs rise over the last year due to rising prices for ingredients such as flour.

However, Greggs has stated it believes cost pressures have probably peaked and that its products are more likely to weather the weakening consumer environment better than many food retailers.

Scott Farnetti Investment Adviser Brewin Dolphin Scott.Farnetti@Brewin.co.uk