Weak retailer performance leads FTSE down

DSG International led the London market into the red today after a disappointing Christmas trading update sent its shares tumbling 12%.

Europe’s largest electricals retailer became the latest to suffer from a difficult festive season while oil stocks and banks were also under pressure.

The gloom overshadowed a strong set of figures from brewer SABMiller as the FTSE 100 Index fell 11.2 points to 6204.5.

There was little reaction from investors to good news on the jobs market, which revealed the number of unemployed has fallen by 29,000 to 1.67 million.

DSG, which owns Currys, fell 23.25p to 171p after it said its margins were under pressure over the Christmas period following disappointing performances in Italy and France.

DSG added that, while sales at Currys were up by 1% in the eight weeks to January 6, the figure masked a poor start that was only rescued by a late Christmas rush.

It was not all gloom in the retail sector after Poundstretcher owner Instore, Argos parent company Home Retail Group and Woolworths fared better in the wake of trading updates.

Home Retail Group was among the risers after stating that profits for the Argos and Homebase chains were likely to be at the top end of expectations. Shares lifted 1.75p to 410p.

Woolworths also protected margins during the festive season, meaning shares in the FTSE 250 Index stock were unchanged at 33.5p. It came despite a 4.6% fall in like-for-like sales.

Instore gained half a penny to 20.5p after it showed signs it had turned the corner as improved stock flow gave Christmas trading a much-needed boost.

Oil stocks were damaged by the weak price of crude, which drifted towards $50 a barrel. With BP also suffering from the fall-out from yesterday’s Baker Report, shares dipped 4.5p to 536.5p. Royal Dutch Shell was off 4p at 1711p.

Mining group Lonmin also fared badly on the market, dropping 60p to 2797p, while Anglo American fell 51p to 2334p and Rolls-Royce shares were off 10p to 481p.

Alliance & Leicester lost 29p to 1104p after Merrill Lynch downgraded its rating on the stock from neutral to sell.

In the top flight, brewer SABMiller jumped 5%, or 55p to 1226p, after benefiting from a positive trading update.

British Gas owner Centrica was ahead by 2%, 6.5p, to 361.75p after Merrill Lynch upgraded the stock and said the fall in wholesale prices should feed through to significantly improved margins.

The rest of the sector fared less well as fading bid talk relating to Scottish & Southern Energy caused its shares to give back gains yesterday. The stock was down 34p at 1526p.

The day’s biggest blue-chip risers were SABMiller up 55p to 1226p, Pearson with gains of 24.5p to 824.5p, Amvescap 16.5p higher at 622p and Man Group up 9.75p to 531.75p.

The heaviest fallers were DSG International down 23.25p to 171p, Alliance & Leicester off 29p to 1104p, International Power 9p lower at 358.25p and Scottish & Southern Energy, which lost 34p to 1526p.