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LONDON (Alliance News) - The price war among UK supermarket chains deepened Friday, when J Sainsbury pledged to further lower prices on its branded products and said it would now match prices against Asda alone, dropping Tesco from its price match pledge.

The move comes ahead of Sainsbury's second quarter trading update next Wednesday, which analysts think will show sales momentum has weakened even further.

Sainsbury's, the UK's third-largest supermarket chain by market share, said its brand match coupons - which cover any difference in price of branded goods between Sainsbury's products and those at its rival - will now only compare its prices and deals on brands with Asda, and no longer Tesco. Since launching the brand match scheme three years ago, the grocer had been comparing prices with both Asda and Tesco.

The grocer, said it will be lowering base prices on thousands of lines within its food business, and will match Asda's prices on brands even when those products are on promotion.

Sainsbury's said the lower prices will kick in on October 2, and it has committed to the pricing match for at least 18 months.

"We will continue to run as many promotions as before and they will be just as competitive, but customers now have the added reassurance that prices will always be great value at Sainsbury’s, both on and off promotion," Market Director Sarah Warby said

The supermarket chain's shares hit a six-year low on Tuesday after monthly industry data from Kantar for the 12 weeks to September 14 revealed another fall in Sainsbury's market share and sales, with sales declining 1.8% year-on-year and its market share shrinking to 16.2% from 16.6%.

The stock was down again Friday at a new six-year low. Its shares were down 1.9% midday, one of the worst-performing stocks in the FTSE 100.

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Markets: UK stock indices are mostly lower amid continued geopolitical fears, US rate rise concerns, and a dearth of fresh market data, and supermarkets are underperforming once again as J Sainsbury made the latest move in a deepening price war in the grocery sector.

Investors appear in no mood to add to equity positions ahead of the weekend, with the UK parliament debating over whether to re-join the war in Iraq, and reports emerging that Russia is considering retaliating against western sanctions by allowing the seizure of foreign owned property on its soil.

Trading in the US index futures suggests that Wall Street stocks may open slightly higher. The DJIA is pointed up 0.3%, the S&P 500 up 0.2%, and the Nasdaq Composite up 0.3%.

FTSE 100: flat at 6,641.67
FTSE 250: down 0.3% at 15,386.85
AIM ALL-SHARE: down 0.4% at 748.13
GBP-USD: flat at 1.6322
EUR-USD: down at 1.2745
GOLD: flat at USD1,222.39 an ounce
OIL (Brent): up at USD97.24 a barrel
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Other Top UK Corporate News
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Lloyds Banking Group raised GBP161 million by selling 57.5 million shares in TSB Banking Group at 280 pence each, a sale that leaves it with about a 50% stake in the business it is spinning out. Lloyds said the latest share sale representing around 11.5% of TSB's issued ordinary share capital. It added that it expects to continue consolidating TSB's financial results in its own accounts.
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London Stock Exchange Group got acceptances for 97.07% of the shares available in its rights issue, and its banker Barclays secured subscribers for the remainder. In a statement, the company said it received valid acceptances for nearly 72.2 million shares in the rights issue, and Barclays then secured subscribers for the remaining 2.2 million shares not validly taken up. Last month, the stock exchange operator announced a GBP938 million, 3 for 11 fully underwritten rights issue to help fund the USD2.70 billion acquisition of Russell Investments, which it had announced in June. It priced the offering at 1,295 pence a share.
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British Sky Broadcasting Group has signed a new five-year agreement with American Football association the National Football League, which includes rights to 'Monday Night Football,' starting in 2015. Under the new deal BSkyB has rights 80 live fixtures a season, including up to five games each week of the regular season. Coverage will also include matches from the NFL's International Series.
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De La Rue has warned that its underlying operating and pretax profit for the current year will be GBP20 million lower than the previous year, and lowered its expectations for next year as a result of deteriorating trading conditions. De La Rue also said that, in light of the difficult trading environment, it intends to "reappraise" the level of its dividend for the full year. It expects to propose an interim dividend of 8.3 pence, down from 14.1 pence a year before.
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Waste management company Shanks Group said it now expects to miss its own full year expectations by about 15%, after trading at its solid waste Benelux business deteriorated even further in the first half of its financial year in the face of stiff competition. "The competitive environment remains intense, with market participants seeking to gain volumes by aggressive pricing in order to offset pressure on gate fees, lower volumes and prices of recyclates. We are broadly maintaining inbound volumes, albeit with an adverse mix," the company said.
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Filtronic said its broadband business is likely to perform below current market expectations for the full year, as a key customer product introduction has been delayed. In a statement ahead of its annual general meeting, the microwave electronics products company said that it has traded broadly in line with expectations in its first quarter, although its broadband division performed somewhat below expectations. Broadband's performance in the second quarter is expected to be stronger, but there is uncertainty over its second half outlook as a key customer product introduction was delayed. The company also cited the changing landscape for business in Russia, as a number of its modules are made for original equipment manufacturer customers selling to Russian operators.
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Fyffes and Chiquita Brands International have unanimously approved a revised merger agreement, the latest step in a battle for Chiquita with rival bidders the Cutrale Group and the Safra Group.
Under the terms of the new deal, Fyffes shareholders will now get 0.1113 ChiquitaFyffes shares for each Fyffes share they currently hold upon completion of the merger. Chiquita shareholders will receive 1 ChiquitaFyffes share per Chiquita share they hold. Under those terms, Chiquita shareholders are expected to own 59.6% of the combined business, an increase from the 50.7% they would have owned under the terms of the previous agreement. Fyffes shareholders are now expected to own approximately 40.4% of the ChiquitaFyffes business, on a fully diluted basis.
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AIM Movers
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Kalimantan Gold Corp has soared after it reported its maiden inferred mineral resource for the Beruang Kanan prospect in Indonesia. Oxus Gold is up after it raised GBP175,000 through a share subscription with Darwin Strategic Ltd. Oxus issued Darwin 9.2 million shares at 2.05 pence per share. TomCo Energy has seen its shares drop by almost a third after it has raised GBP1 million via a discounted conditional placing which will be used to complete the permitting process at the Holliday Block in Utah, US and for working capital. Gowin New Energy Group is also down heavily after it said its pretax profit and revenue fell in the first-half, after its second quarter was hit by the implementation of better credit policies and tougher qualification criteria for government street lighting projects in the Chinese market. It cautioned that its full-year results may fail to meet expectations. Andrews Skykes Group is another faller after it said its pretax profit fell in the first half of the year as its hire and sales business struggled in both the UK and Europe, although it expressed cautious optimism for a "satisfactory performance" in the remainder of 2014 despite seeing disappointing trading in the third quarter so far. Premier Gold Resources is down after it said no material operational developments occurred during its first-half as it continues to press its case with the Kyrgyz authorities so it can continue its work programme at its Cholokkaindy license.
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Top Economics And General
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The military campaign against the terrorist group Islamic State in Iraq and Syria "will not take months but years," British Prime Minister David Cameron says in a debate ahead of a vote on whether the UK will join the new military action by the US, France and their Arab allies in the region.
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The US and its Arab allies mounted airstrikes against oil refineries controlled by the Islamic State radical group in eastern Syria for the second straight day, a monitoring group said on Friday. The Britain-based Syrian Observatory for Human Rights added that the overnight strikes into Friday targeted at least two areas housing oil installations in the province of Deir. The targets included the major al-Tanak oilfield on the eastern edge of Deir al-Zour bordering Iraq, according to the Observatory's head, Rami Abdel-Rahman. The Islamic State seized the field along with others in the area in July when the al-Qaeda splinter group established a foothold in eastern Syria. US Central Command has said that hitting the fields successfully choked off a source of revenue, said to generate about 2 million dollars a day.
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Iranian President Hassan Rouhani on Thursday told world leaders at the UN General Assembly that the US-led coalition against the Islamic State group in the Middle East was a "strategic mistake."
Rouhani said his country was prepared to "play our permanent constructive and positive role," in fighting against the terrorism and extremism, but emphasized that Western leadership in the Middle East war was unwelcome. "I believe if countries claiming leadership of the coalition, do so to continue their hegemony in the region, they would make a strategic mistake," Rouhani said.
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The average asking price for a house in the UK was flat on month in September, property tracking website Hometrack said on Friday - snapping a string of 19 straight months of gain. That followed the 0.1% increase in August. Among the individual components of the survey, new buyers with agents, volume of property listings, sales agreed and asking price achieved all moved lower in September. On a yearly basis, prices climbed 5.0%, slowing from the 5.5% increase in the previous month.
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Italy's business confidence declined for the fourth consecutive month to a 13-month low in September, survey data from the statistical office Istat showed Friday. The business confidence index dropped to 95.1 in September from 95.4 a month ago. The score was expected to fall to 95.3.
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Germany's import prices declined at a faster rate in August, though less than the consensus estimate, a report from the statistical office Destatis showed Friday. Import prices dropped 1.9% year-over-year in August following the 1.7% fall in July. Economists had expected import prices to decline 2%.
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Germany's consumer sentiment is set to fall in October, a survey by the market research group GfK, based on responses from 2,000 households, said Friday. The forward-looking consumer confidence index dropped to 8.3 in October from 8.6 in September. It was forecast to drop marginally to 8.5.
This was the second consecutive decline for the indicator, but it continues to be at a good level, the research group said.
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French consumer confidence remained stable as expected in September, survey data from the statistical office Insee showed Friday. The consumer confidence remained at 86 for the third consecutive month in September, in line with the consensus estimate.
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Core consumer prices in Japan gained 3.1% on year in August, the Ministry of Internal Affairs and Communications said on Friday. That was below forecasts for 3.2% and down from 3.3% in July. Overall inflation was up an annual 3.3% - matching forecasts and slowing from 3.4% in the previous month.
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Wins and losses were scored Thursday in the battle with Ebola in West Africa, set against the backdrop of world leaders gathering in New York to pledge more than 300 million dollars of additional support. Bright spots came in the form of a World Health Organization (WHO) announcement that infections had stabilized in Guinea, one of the disease's hot spots, as well as the reported recovery of a US doctor. However, a Spaniard airlifted home was reported dead of the disease. Speaking at a UN-organized event, US President Barack Obama said that international cooperation was vital to curbing the disease.
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Afternoon Watchlist (all times British Summer Time)

13:30 US Gross Domestic Product
13:30 US Core Personal Consumption Expenditures
14:55 US Reuters/Michigan Consumer Sentiment Index

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Monday's Key UK Corporate Events

DX Group - Full Year Results
Aberdeen Asset Management - Trading Statement
Globo - Half Year Results
Compass Group - Trading Statement
MJ Gleeson - Full Year Results

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Monday's Key Economic Events (all times British Summer Time)

07:00 Germany Gfk Consumer Confidence Survey
09:30 UK Consumer Credit
10:00 EU Business Climate
10:00 EU Consumer Confidence
13:00 Germany Consumer Price Index
13:30 US Core Personal Consumption Expenditure
15:00 US Pending Home Sales

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