Gloomy session for retailers at FTSE

High street retailers endured a gloomy session today after a profits warning from Currys and PC World owner DSG International.

DSG confirmed fears of tough Christmas trading by warning annual profits would be up to £50 million lower than expected, while fashion chain Next said it was “extremely cautious” about prospects this year.

The FTSE 100 Index was 14.3 points lower at 6402.4 by mid-morning, with several big-name retailers on the back foot.

DSG – recently relegated from the top flight – slumped nearly 22%, or 23.5p, to 83.75p after a particularly weak UK computing performance dealt the profits blow.

In the Footsie, B&Q owner Kingfisher was the heaviest faller, despite less dependence on Christmas trading. Shares were almost 7% lower, down 10.2p at 136.5p.

Argos and Homebase owner Home Retail Group was caught in the sell-off with a fall of nearly 6% or 18p to 302.25p, while Next suffered despite predicting full-year profits “slightly ahead” of City forecasts.

While Next’s financial management has been responsible for the stronger bottom line, the shares still fell nearly 7% or 111p to 1555p, as traders noted the company did not expect a return to like-for-like sales growth in the UK in 2008.

Other retailers struggling to make headway included H Samuel jeweller Signet. The high street gloom and record gold prices sent the stock into reverse in the FTSE 250, down 4p to 64.75p.

Elsewhere, energy companies were stronger after oil prices touched 100 US dollars a barrel last night.

Tullow Oil was the leading Footsie riser, up more than 4%, or 27.5p, to 672.5p. BP rose 14p to 630.5p while Royal Dutch Shell added 31p to 2128p.

Bid speculation also continued to surround mortgage lender Alliance & Leicester, lifting the stock 12.5p to 766.5p after gains of 16% in yesterday’s session.