Footsie hits three-month low

The FTSE 100 Index slumped to its lowest level in three months today as a profits warning from B&Q owner Kingfisher cast a chill over the retail sector.

Fears of a consumer slowdown were heightened after the shock update, which forced Kingfisher’s shares 7% lower and dragged a series of other retailers into the red.

Heavy falls by steelmaker Corus also put pressure on the Footsie, which fell 56.1 points to 4789.4 – leaving it within touching distance of its lowest point this year and far off February’s peak of 5077.

Kingfisher was the second heaviest Footsie faller, dropping 17.75p to 254.25p following its warning that first quarter retail profits were likely to be 15% lower after a 6% drop in like-for-like sales.

As a result, electricals chain Dixons slipped 6p to 139p, GUS fell 23p to 848p, Marks & Spencer eased 11p to 341.75p and Next dipped 27p to 1485p.

A more upbeat performance across the Atlantic failed to lift spirits. The Dow Jones Industrial Average stood slightly higher than its opening mark by the end of the day in London.

Back in the UK, the day’s biggest casualty was Corus, off more than 7% or 3.5p to 43.25p as investors fretted over the possibility of falling steel prices.

All of the financial stocks were in the red, including Legal & General – off 1.25p to 106p despite reporting better-than-expected sales figures.

The worst-hit banking stock was Northern Rock, weakening 4% or 27.5p to 756p as it went ex-dividend, meaning new investors are not entitled to the latest payout.

The weakness among retailers sent investors towards the more defensive sector of utilities as Severn Trent added 10p to 951p, National Grid Transco lifted 5p to 502.75p, Scottish Power rose a penny to 421p and United Utilities lifted half a penny to 626p.

There was better news in the FTSE 250 Index as online bank Egg gained 3p to 99p following its announcement that a restructuring of its management team would help it to save £12 million.

Cumbrian brewing company Jennings Brothers also rose 9p to 416.5p after directors agreed to back a takeover by Wolverhampton & Dudley Breweries, which fell 7p to 1033p.

But the UK’s largest estate agent, Countrywide, lost 10% or 32p to 290p as it issued another profits warning after blaming the General Election for subduing the property market.

Builders’ merchant Travis Perkins added to the bleak outlook for the DIY market when it said trading conditions were likely to remain difficult, leaving its stock 5p lower at 1612p.

And leisure group Rank slipped 4.5p to 261p after reporting a “muted” performance by its gaming division, although its overall performance was in line with hopes.

The highest Footsie climbers today were Gallaher up 10.5p to 812.5p, Severn Trent rising 10p to 951p, National Grid Transco up 5p to 502.75p and GlaxoSmithKline rising 9p to 1241p.

The heaviest fallers were Corus down 3.5p to 43.25p, Kingfisher off 17.75p to 254.25p, Dixons down 6p to 139p and Antofagasta off 47p to 1127p.