Blue chips drag FTSE down

London’s blue chips were on the back foot today, despite a stronger showing from the retail sector.

The FTSE 100 Index – which rallied 2.5% yesterday after recent heavy losses - was unable to maintain the advance, slipping 23.1 points to 6257.6 by mid-morning.

But Home Retail Group featured high among the risers after the firm said it was on track for healthy profits as gains from its Argos stores offset sales declines at Homebase.

After a grim session for retailers yesterday, the update lifted Home Retail Group more than 2%, or 8.5p, to 419.25p, while Currys owner DSG International advanced 0.7p to 147.6p.

Clothing retailer Next also gained 31p to 1971p on broker upgrades following better than expected profits, although the company has also warned of tougher times ahead for its Directory business.

The leading Footsie riser was arms giant BAE Systems, following reports that the company was set to claim a $US3.5bn (£1.75bn) contract for the US Army. The stock was nearly 3%, or 11.75p, ahead at 475.25p.

Meanwhile a host of stocks turning ex-dividend – meaning that shareholders are not entitled to the latest dividend payment – dragged on the index.

Miner Kazakhmys led the decline, down 24p to 1292p, followed by sector peer BHP Billiton off 27p at 1444p. Another ex-div stock, Guinness maker Diageo, slipped 18p to 1041p.

Other companies in the red included broadcaster ITV, down 1.8p at 110.9p after failing to inspire buying interest in the wake of a strategic update.

The company, which lost nearly 2%, is planning to boost revenues from its production and online businesses, and also reported an improving television advertising climate.

Coal-fired power station owner Drax was off 3.5p at 623.5p despite Goldman Sachs saying recent falls in the share price were overdone.