The FTSE 100 Index finished lower today as worries over the impact of dire Christmas trading conditions continued to hammer shares in the sector.
Marks & Spencer shares dropped 5% or 12.25p to 231.25p amid fears of another profits warning, while Debenhams, Argos owner Home Retail Group and Comet firm Kesa Electricals were sharply lower in the FTSE 250 Index.
The wider market lost only a fraction of recent gains, with the FTSE 100 Index down just 14 points at 4367.3 after adding more than 300 points in the first two sessions of the week. Sentiment was helped by a positive start to trading in New York, with the Dow Jones Industrial Average up 2% at the time of London’s close.
Miners were on the front foot after Rio Tinto announced plans to axe 14,000 jobs in a major cost-cutting drive.
The company’s desire to lower its £26bn (€29.67bn) debt pile found favour as shares surged 20% or 256p higher to 1514p – giving investors some good news after a recent slump when rival BHP Billiton pulled out of a takeover.
Other risers included Vedanta Resources, which cheered 90.5p to 707p, and Antofagasta after a rise of 34.25p to 456p.
Retailers were under pressure after Morgan Stanley said Christmas trading looked set to be the worst in the sector for many years. There was also further poor trading figures from JJB Sports, which fell 0.75p to 10.25p, a drop of 7%.
As well as an 8.9% fall in like-for-like sales, JJB shareholders were disappointed by the company’s failure to sell its lifestyle brands Qube and the Original Shoe Company.
Next was down almost 4% or 44p to 1080p, while in the FTSE 250 Index Home Retail was off 15p at 226p, Kesa Electricals fell 6.75p at 98.25p and Game Group slipped 9p to 123.5p.
Debenhams was off 2.75p at 22.75p but the leading casualty in the second tier was Punch Taverns, off 11.5p at 61.5p – a fall of 11% – as consumer spending came under more pressure.
Back in the top flight, financial stocks had a disappointing session with Barclays off 5.8p at 156.2p, insurer Aviva down 10.25p to 410.75p and Asian-facing Standard Chartered 48p lower at 750p.
HBOS, whose shareholders will vote on its takeover by Lloyds TSB on Friday, lost an initial gain to close 0.9p lower at 88.9p. HSBC proved an exception with a gain of 4.5p to 762.75p.
In corporate news, shares in Ideal Shopping Direct slumped 29% after it reported a sharp fall in sales and warned full-year trading losses were likely to hit £4m (€4.56m). Shares were off 14.5p at 36p.
The biggest risers Rio Tinto up 256p at 1514p, Vedanta Resources ahead 90.5p at 707p, Wood Group up 74p at 869p and Antofagasta ahead 34.25p at 456p.
The biggest fallers were 3i Group down 22p at 334p, Standard Chartered off 48p at 750p, Legal & General down 4.6p at 80.5p and Marks & Spencer off 12.25p at 231.25p.