A profits warning from Currys owner DSG International weighed on retailers today and pushed blue-chip stocks into negative territory.
The firm said first-half profits would take a £20m hit after a cut-price clearance at PC World impacted margins, causing shares to slide 9%, or 11.9p, to 124.1p.
The FTSE 100 Index closed down 68.3 points at 6609.4 as the negative sentiment spread throughout the retail sector.
A lower opening on Wall Street helped accelerate the falls after a 32% drop in earnings at Bank of America following loan write-downs added to the unease in the fragile financial sector.
B&Q firm Kingfisher was one of the hardest hit after DSG’s news, off 7.8p at 176.7p, with Argos owner Home Retail Group not far behind on the fallers board, down 13.75p at 375.5p.
Clothing retailer Marks & Spencer was 10.5p lower at 625.5p despite a surprise lift in retail sales figures during September.
Meanwhile, sports retailers and replica shirt sellers were on the back foot after the England football team’s defeat in Russia yesterday amid fading hopes of participation in next year’s European Championships.
FTSE 250-listed Sports World owner Sports Direct International fell 5%, or 8p to 148.5p, JJB Sports was off 5.25p at 166p and JD Sports parent John David Group dropped 11p to 434p.
Kit maker Umbro swung from earlier losses following the England result, to close up 33p higher at 153p – a leap of 28% – after it confirmed it had received potential takeover interest.
Back in the top flight, housebuilders were enduring a tough session after figures showing lower mortgage lending last month, compounding warnings of a possible property crash from the International Monetary Fund.
Taylor Wimpey shed 13.75p to 253.25p, while Barratt Developments slipped 35.5p to 658.5p.
Foster’s brewer Scottish & Newcastle extended yesterday’s 19% gain made on news that European rivals Carlsberg and Heineken were considering a joint bid for the company. Shares were up 1.5p at 757.5p.
The news also lifted Peroni brewer SABMiller 1p to 1463p.
British Airways was ahead 6.25p at 430p after reports suggested it is 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 2.5p to 620p, also buoyed by solid quarterly results from fellow chocolate group Nestle.
Elsewhere, baby goods retailer Mothercare slipped 6.75p to 403p, despite a strong second quarter update, boosted by its acquisition of the Early Learning Centre earlier in the year.
Mortgage lender Bradford & Bingley was 4p higher at 267.75p as analysts at Collins Stewart deemed the stock a short-term buy, but a sell-rating on top tier rival Alliance & Leicester saw the group lose 27.5p to 756p.
The biggest Footsie risers were Smith & Nephew up 16p at 615p, Rexam ahead 10.5p at 538p, Mitchells & Butlers up 10p at 641p, and British Airways ahead 6.25p at 430p.
The biggest fallers were DSG International down 11.9p at 124.1p, Taylor Wimpey off 13.75p at 253.25p, Barratt Developments down 35.5p at 658.5p and Hammerson off 53p at 1066p.