FTSE turns around
The London market staged a late session turnaround today after positive US economic data helped offset hefty falls among UK retailers.
The FTSE 100 Index closed up 62.7 points at 6479.4 after spending most of the day in negative territory.
The rise followed figures in America showing an increase in new jobs during December, easing concerns over the US economy.
But on the Footsie, the session was dominated by woes in the retail sector following a profits warning from Currys and PC World owner DSG International and downbeat comments from fashion chain Next.
Gains for heavily-weighted petrochemical stocks after oil remained at 100 US dollars a barrel helped pare back losses.
DSG’s warning that annual profits would be up to £50m (€67m) lower than expected after PC World bore the brunt of a spending slowdown overshadowed the session’s trading, fuelling concerns over the Christmas trading period for the entire retail sector.
Shares in FTSE 250 firm DSG tumbled more than 27%.
The company – recently demoted from the top flight – fell 29.25p, to 78p, while its fellow FTSE 250 stock, Comet owner Kesa Electricals, showed a fall of 8%, or 19.5p, to 215.5p.
Next was the biggest faller despite predicting full-year profits “slightly ahead” of City forecasts.
While Next’s financial management has been responsible for the stronger bottom line, the shares still fell nearly 7% or 114p to 1552p, as the company warned it was unlikely to see like-for-like sales growth from its UK stores in 2008.
B&Q owner Kingfisher was another heavy faller, despite depending less on Christmas trading. Shares were 5% lower, down 7.2p at 139.5p.
Argos and Homebase owner Home Retail Group was caught in the sell-off with a fall of nearly 6%, or 19p to 301.25p.
Other retailers struggling to make headway included H Samuel jeweller Signet. The high street gloom and record gold prices sent the stock into reverse in the FTSE 250, down 4.75p to 64p.
Elsewhere, energy companies were stronger after the fresh record for crude oil prices.
Tullow Oil was the leading Footsie riser, up 6%, or 36p, to 681p. BP followed close behind, up 19p to 635.5p, while Royal Dutch Shell added 55p to 2152p.
International Power also moved 12.75p higher to 461.25p while Scottish and Southern Energy advanced 26p to 1657p. Premier Oil meanwhile was one of the top risers in the FTSE 250 with gains of 62p to 1370p.
Takeover speculation over mortgage lender Alliance & Leicester faded as the session wore on. A&L was nearly 2% higher earlier in the day – following a 16% gain yesterday – but later fell back to close up 4p at 758p.
The biggest Footsie risers were Tullow Oil up 36p at 681p, Lonmin ahead 134p at 3201p, Vedanta Resources up 88p at 2165p and BHP Billiton ahead 61p at 1597p.
The biggest Footsie fallers were Next down 114p at 1552p, Enterprise Inns off 32.25p at 445p, Home Retail Group down 19p at 301.25p and Kingfisher down 7.2p at 139.5p.
