SUPERMARKET Morrisons enjoyed a positive session as the wider market was dragged lower by falling mining stocks and more worries over Ukraine.

The grocery chain, whose shares have endured a miserable year so far, rallied for a second day in a row after Deutsche Bank removed its sell rating, a day after industry till roll figures showed an improved trend for sales over the last four weeks.

It rose 2.5p to 186.9p as the wider FTSE 100 Index dropped 24.9 points to 6805.8.

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A fall in Chinese iron ore prices drove mining stocks lower and meant the top flight continued its resistance against setting a new record high.

Markets were also hit by the escalating Ukraine conflict, with president Petro Poroshenko calling an emergency meeting of the nation's security council after he said Russian forces had entered his country.

Germany's Dax was sharply lower and France's Cac 40 was also in the red while in New York, the Dow Jones Industrial Average was down at the time of the close in London.

On currency markets, the pound was flat against the greenback at just under 1.66 US dollars and slightly stronger against the single currency after a low inflation reading from Germany.

It added to speculation that the European Central Bank will need to take further action to combat ultra low consumer price growth from gripping the 18-nation bloc and saw the pound edge ahead at just under 1.26 euros.

In stocks, miner Rio Tinto was one of the biggest fallers with a decline of nearly four per cent or 126.5p to 3209p, while Anglo American dropped 55.5p to 1512.5p and BHP Billiton eased 54.5p to 1891p.

In contrast to Morrisons, shares in Tesco and Sainsbury's remained under pressure after the Kantar Worldpanel data.

Tesco was 3p cheaper at 246.3p after it emerged sales were four per cent lower in the 12 weeks to August 17, while Sainsbury's was down 0.7p at 303.5p following a marginal drop in its market share.

The flight from the grocery sector included online player Ocado after analysts at Redburn Partners slashed their target price on the stock by almost half in part due to fears that the company's technology is over-valued by the market.

Shares slumped 16 per cent or 64.3p to 339.3p in a session of major moves for a number of stocks in the FTSE 250 Index.

Consumer electronics semiconductor firm CSR, which specialises in Bluetooth technology used to connect devices, was 36 per cent higher, up 205p to 780p, after it said it had rejected a takeover approach from US rival Microchip Technology.

Meanwhile inkjet print firm Xaar dived 22 per cent after lower half-year profits and a cut to its expectations for revenues this year. The stock was down 121p lower at 439p. One risers on the FTSE 100 Index were CRH up 28p to 1426p.