Retail sector on back foot in UK

The retail sector was on the back foot today after a profits warning from Currys owner DSG International impacted the sector.

Shares in the firm fell more than 6%, or 8.4p to 127.6p, after the electricals group was forced to cut prices to clear stock backlogs at PC World – knocking margins and hitting profits by around £20 million.

The negative sentiment dragged on the wider FTSE 100 Index which slipped 14.9 points to 6662.8 by mid-morning.

Other retailers in negative territory following DSG’s update were Argos owner Home Retail Group, down 4.25p to 385p and B&Q firm Kingfisher off 4p to 180p. Clothing and retailer Marks & Spencer was 8p lower at 628p despite a surprise lift in retail sales figures during September.

Meanwhile the England football team’s defeat in Russia yesterday hit replica shirt sellers amid fading hopes of participation in next year’s European Championships.

Sports World owner Sports Direct fell 7p to 149.5p – a loss of more than 4% - while JJB Sports was off 4.5p at 166.75p and JD Sports parent John David Group dropped 5p to 440p.

Foster’s brewer Scottish & Newcastle was 6p higher at 762p, following a 19% gain yesterday on news that European rivals Carlsberg and Heineken were considering a joint bid for the company. The news also lifted Peroni brewer SABMiller 22p to 1484p.

British Airways was up 5p at 428.75p after reports stated it is understood to be considering a renewed attempt to merge with American Airlines parent AMR Corp.

Dairy Milk group Cadbury Schweppes continued to benefit from a broker upgrade from ABN Amro yesterday, which suggested confectionery profits would exceed expectations for the year. The stock rose 6.5p to 624p.

Elsewhere, baby goods retailer Mothercare slipped more than 1%, or 5.75p to 404p, despite a strong second quarter update, boosted by its acquisition of Early Learning Centre earlier in the year.