Investors reeling from the continuing falls in the stock market went on a supermarket sweep. Buoyed by Waitrose reporting a 13 per cent weekly jump in sales — as the hot weather triggered a rush for sandwiches and barbecue food — the grocers were the FTSE 100’s top performers. Tesco was number one, up 8.7p to 357.4p. Wm Morrison lifted 4½p to 256¼p and Marks & Spencer rose 5¼p to 319p.

However, the wider market lost still more ground, with the FTSE 100 closing down 31.49 at 4,127.17, completing its fourth consecutive weekly decline. Weak consumer sentiment figures in the US, which further stoked concerns about the health of the global economy, did the damage. That, in turn, drove down the price of crude and metals and made oil stocks and miners the two biggest drags on the index. Rio Tinto stood out, down 65½p at £19.01½p, amid reports the arrest of its employees in China is connected to its negotiations over iron ore prices with China’s steel producers.

Aviva was the worst performer for the second day running, down another 14¼p to 276¾p. Its apparent attempt to prepare the market for a dividend cut is heightening fears over the solvency of life insurers, which were made explicit by an S&P equity analyst on Thursday, who said a 50 per cent dividend cut would not be enough and that disposals would be necessary.

Standard Life fell 5.7p to 173p, and Prudential, also dogged by concerns that the FSA would impose tougher accounting methods, lost 10p to 353p. Legal & General fell 1.39p to 49.9p and Old Mutual lost 2.05p to 74.88p. All have rallied on the recent equity market recovery and are now taking a beating on its fall.

Sentiment was not helped by a profit warning from Bodycote, the processor of metal parts for industry, down 13½p to 111¾p. The company said that car industry orders were flat while those from aerospace and oil and gas sectors were still falling. KBC Peel Hunt said hope of a recovery next year for engineers was misguided and it cut Chloride, the emergency power provider, from “buy” to “hold” with a 140p target. Chloride lost 9p to 134p, saying the prospect of a bid from US firm Emerson was still alive but at a lower price of about 160p-185p.

SThree, the recruitment group specialising in IT, gained 11¼p to 182p after HSBC upgraded to “buy” from “hold”, saying it had fallen too far given that the dividend looked secure.

Catlin lost another 5¼p to 293¼p and fellow Lloyd’s insurer Novae fell 11p to 293p. Both are exposed to casualty policies and have been falling after the Italian rail disaster, which came on the heels of the Air France crash. Claims from both were expected to hit $35 million, said JPMorgan, cutting its Catlin target from 563p to 399p.

SIG, the maker of insulation products, finished unchanged at 88p having earlier climbed to 93p on the back of a trading update.

African Minerals, Frank Timis’s AIM-listed iron ore miner in Sierra Leone with a £440 million market value, gained 20p to 250p on revived talk of Eurasian Natural Resources, down 9½p at 650½p, eyeing a bid.

• New York: US stocks fell as data showed consumer sentiment hit its lowest level since March, souring investor mood. The Dow Jones industrial average closed 36.65 points lower at 8,146.52.

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