Retail sector drags FTSE
Disappointing news from the retail sector dragged the market lower today as it gave up gains made earlier in the week.
Shares in GUS fell 1% after it posted lower like-for-like sales at its Argos and Homebase operations, while Next topped the Footsie losers’ board down 4%.
After a positive session yesterday, Marks & Spencer shares steadied at just under 400p as the FTSE 100 finished the day down 38.5 points at 5342.2.
But there was better news for poker giant PartyGaming, which ended its downward spiral in share price as concerns over the online poker market looked to be overblown.
Investors latched on to a surge of new players at smaller rival Sportingbet as evidence that the growth prospects for the emerging sector remained intact, boosting shares in PartyGaming by 10% or 7p to 78.5p.
The poker giant was one of only a few blue-chip stocks to travel into positive territory today, as market morale took a knock from rising oil prices.
It was also weighed down by inflationary pressures in the US which led the Federal Reserve to hint at further rate rises, while Bank of England Governor Mervyn King signalled he was not convinced by the case for lower rates.
In the retail sector, GUS shares were down 11.5p to 845p after same store sales fell 3% at catalogue business Argos.
Next shares hit their lowest level for nearly two years as analysts speculated that blue-chip rival M&S might be taking a greater slice of the market.
But M&S was not able to capitalise fully, with shares finishing down 2p at 395.25p – below the all important 400p benchmark set last year by former suitor Philip Green.
Oil stocks also finished the day in negative territory, with BP 3.5p lower at 634p and Royal Dutch Shell off 22p at 1840p, while Cairn Energy retreated 31p to 1835p.
Outside the top flight, retailers Burberry and JJB Sports fell victim to the spending slowdown.
Shares in Burberry were down 7% to 383p as it faced up to a soft UK market, while shares in JJB Sports fell 2% to 194.5p on the back of a 4.3% fall in like-for-like sales in the 10 weeks to Sunday.
But clothing chain Peacock plotted a steady course after announcing an improved sales trend in the second quarter. The group, which is the subject of a management buy-out, rose 6.75p to 323.75p.
Moss Bros also reported positive sales and finished the day 2p higher at 93.5p.
Among other lower-tier stocks, Carphone Warehouse lost hold of the earlier 2% rise achieved after it reported better-than-expected trading in the second quarter. Investors took profits to leave Carphone 4.5p cheaper at 190.5p.
Sportingbet lifted 9% or 27p to 314p after reporting strong growth in customers and poker commissions since the start of August.
The news pulled rivals including Empire Online and 888 Holdings higher – up 9p and 5.75p at 111p and 151.75p respectively – to draw a line under a tough run of sessions for the online gaming sector.
The highest Footsie risers today were PartyGaming up 7p to 78.5p, Capita Group up 4.25p to 384.25p, Old Mutual adding 1.5p to 136.25p and GlaxoSmithKline lifting 15p to 1445p.
The heaviest fallers were Next off 56p to 1297p, Cable & Wireless off 4.25p to 112p, Xstrata down 41p to 1382p and Rolls-Royce Group off 10.5p.
