Retails stocks take a hammering

Retail stocks took a battering on the London market today as investors’ nerves showed through ahead of a batch of crucial trading updates next week.

Only a strong performance by the financial and telecoms sectors limited the damage as the FTSE 100 Index narrowly stayed above the 4000 barrier.

By the close, the Footsie was down 4.6 points at 4004.9 after remaining stuck in a narrow trading range for all of the session.

But at least holidaying traders will return to their desks on Monday with the blue-chip index 115 points stronger than at the close of trading on December 20.

However, any new found resolve will be tested next week by Christmas trading statements from a number of retailers, including Dixons and Next.

The prospects for the sector appear less than rosy if the mood of investors is anything to go by.

Analysts said the fall was in continued reaction to a disappointing survey yesterday about sales in the run-up to Christmas, and amid concern that margins have suffered after shoppers saved their spending for the winter sales.

Retailers dominated the fallers board with electronics group Dixons down 6.75p at 143p and B&Q-to-Comet group Kingfisher off 5%, or 11.5p at 215.75p.

Argos owner GUS eased 14.5p to 571.5p, Boots lost 20p to stand at 574p and fashion retailer Next tumbled 2%, or 14.5p, to 733p.

Supermarkets enjoyed mixed fortunes after rival Asda said it had enjoyed a happy Christmas, with market leader Tesco down 3.25p at 192.5p but J Sainsbury up 3.75p at 287.25p and Safeway 3.75p stronger at 209p.

Elsewhere, a clutch of banks and insurers pushed ahead and included HSBC, up 8p at 708.5p, Barclays 3.25p stronger at 397.25p and Royal Bank of Scotland 15p brighter at 15.42p.

Among the insurers, Norwich Union-owner Aviva rose 3.5p to 479.5p and rival Prudential lifted 1.5p to 461p while the telecoms sector weighed in with Vodafone rising 1p to 118.25p and mmO2 gaining 0.5p at 47.25p.

Outside the Footsie, smaller retailers were also struggling with Woolworths down 4%, or 1.5p to 35.5p and discount group Matalan 5p cheaper at 205p.

One of the session’s biggest movements came from troubled office group Regus, after reports said New York-based investment firm Indigo Capital was considering a takeover bid.

Shares in Regus, which have fallen from a high of 400p in 2001, surged 49% - up 5.5p to 16.75p.

Other risers included Irish airline Ryanair, up 24.5p at 470.5p as it said it carried more than 670,000 passengers in December – a 46% increase on its December 2001 total. FTSE 100 rival British Airways also gained, up 2p at 145p.

The biggest Footsie risers were Pearson up 20.5p at 595.5p, Hanson ahead 9.5p at 291.5p, Rolls-Royce up 3p at 113p and BT Group ahead 5p at 207p.

The biggest fallers were Kingfisher down 11.5p at 215.75p, Dixons off 6.75p at 143p, Schroders NV down 20.5p at 483p and Sage Group off 4.75p at 135.25p.