FTSE pulled down by retailers, Wall Street
The London market extended its losses today as retailing gloom and a poor showing on Wall Street dragged the top flight down.
After finishing yesterday on a two-and-a-half year high, the FTSE 100 Index added to its deficit in the first hour to stand 36.7 points off at 4810.3 by mid-morning.
Retailers were the main culprits in pulling the Footsie down as fears about a poor festive performance by the sector continued to weigh on investors’ minds.
Traders were also conscious of yesterday’s economic news in New York, where minutes from a December meeting showed that the Federal Reserve believes interest rates are still too low to curb US inflation.
Although the struggling US dollar benefited, the Dow Jones Industrial Average responded poorly, dipping 98.6 points to 10630.8 by the bell.
It was a bad day for retailing stocks in London after investors reacted negatively to news from Next that it was shaving its profits forecasts due to excess stock.
Although Next said it had a strong Christmas, the shares were second in the Footsie fallers, losing nearly 53p to 1628p.
With investors fearing a generally poor performance by retailers over Christmas, other store groups followed Next down. Argos owner GUS retreated 22.5p to 927p, Marks & Spencer was off 5.25p to 338.75p, Dixons down 3p to 152.5p, Boots Group fell 10.5p to 637.5p and Sainsbury’s dipped 2.5p to 270.25p.
Only three top flight stocks were in positive territory – miner Xstrata, drugs group AstraZeneca and insurer Royal & Sun Alliance.
Shares in brewer Scottish & Newcastle dropped 1% or 4.75p to 432.75p after the Competition Commission said the proposed acquisition by its technical equipment joint venture SDE of Coors’ beer dispensing equipment operations was anti-competitive.
In the FTSE 250, Branston Pickle maker Premier Foods lost 3.5p to 271.5p after estimating it lost at least £10m (€14.2m) in sales because of a fire at its Suffolk factory.
