FTSE sinks into red
Concerns over Christmas trading and lower commodity prices called a halt to the new year rally today as the FTSE 100 Index sank into the red.
B&Q owner Kingfisher, Marks & Spencer and Primark parent Associated British Foods were among those on the back foot after Next said pre-Christmas snow cost it £22m (€26m) and music chain HMV reported a 13.6% drop in like-for-like sales in the UK and Ireland.
Miners also weighed on the top tier as metal prices declined, sending the FTSE 100 down 36.5 points to 5977.4 and reversing some of yesterday’s near-2% gain.
Futures trading also suggested a weak start to business on the Dow Jones Industrial Average on Wall Street, with investor nerves building ahead of key US jobs market data on Friday.
The focus in London was largely on the retail sector as Christmas trading statements came thick and fast.
Next and HMV sparked fears over trading among some blue chip stocks, with Kingfisher down 5.6p to 261.4p, AB Foods off 17p to 1147p and Marks & Spencer down 5.6p to 368.6p.
Fashion firm Burberry also declined, off 27p to 1115p.
But it was not all gloom with high street bellwether John Lewis reporting resilient trading, with like-for-like sales up 7.6% in the five weeks to January 1.
Next shares also soon clawed their way out of the red, up 35p to 2050p despite a shaky start as the group confirmed it remained on track to improve profits in the year to the end of January.
There was no such reprieve for HMV, which slumped 21% after the latest disappointing sales figures fuelled City speculation over the future of the chain.
With the company warning it faced a battle to meet a banking covenant test in April, shares fell 6.75p to 25.75p and left HMV with a market value of just over £100m (€118m).
Back in the top flight, Sainsbury’s supermarket was another retailer seeing gains, up 0.6% to 384.5p ahead of its festive trading news next week.
But miners littered the fallers board, led by Anglo American, as metal and oil prices eased back after recent gains.
Royal Dutch Shell was 44p cheaper at 2115.5p.
BP shares also calmed after rallying 6% yesterday on hopes over its Gulf of Mexico oil spill bill and after reports suggesting Shell had considered a takeover during BP’s market turmoil.
