FTSE slides

Lower profits at John Lewis and a sharp fall in sales at catalogue business Argos derailed retail stocks today.

Argos owner Home Retail Group fell more than 7% in the FTSE 250 Index after it said like-for-like sales were 5.8% lower in the second quarter, while its sister company Homebase experienced an 8.3% drop.

With banks also under pressure in the wake of hefty losses at Lehman Brothers yesterday, the FTSE 100 Index slid 72.5 points to 5293.7 by mid-morning. Halifax Bank of Scotland was the bigger financial faller, down 12.75p to 287p.

But retailers dominated the fallers board as negative newsflow in the sector also included a sales dip at John Lewis. The group’s department store chain saw like-for-like sales fall 1% in the six months to July 26, with home goods down 5% in the struggling property market.

The partnership, which reported a 27% fall in half-year profits, added that Waitrose sales were down 1.1% in the last six weeks, although the same period saw a 0.4% rise in like-for-like sales for the department store business.

B&Q owner Kingfisher slipped 9.1p to 128.4p, topping the Footsie fallers board, while Marks & Spencer was off 9p to 238.75p. Morrisons lost 14.75p to 255.5p despite unveiling a 7.6% in same-store sales during the half year to August 3.

Broadcaster ITV led the FTSE 100 Index risers board for a while, up almost 4% or 1.8p to 50.6p, amid takeover speculation prompted by former suitor Virgin Media hiring former boss Charles Allen as a director. ITV discovered yesterday it will be leaving the Footsie later this month because of its recent share price woes.

Heavier Footsie losses were avoided thanks to gains for miners which have been subject to heavy selling recently. Kazakhmys led the way, 36.5p better off at 861.5p.