The FTSE 100 Index was on the back foot today amid more bleak news for the retail sector in the run-up to Christmas.
Concerns over high street prospects have grown and sentiment took a further jolt when music, games and DVD retailer Zavvi called in administrators.
There was little sign of a ’Santa rally’ in London as falling oil prices weighed on blue-chip stocks as well as declines for Asian and US markets - leaving the FTSE 39.1 points lower at 4216.9 by mid-morning.
US markets came under pressure after more gloomy data on the economy and the country’s ailing housing market, which dragged down Japan’s Nikkei 225 and Hong Kong’s Hang Seng.
In London, retailers were again in the spotlight after Zavvi became the third high street chain to crash in 24 hours, following the Officers Club chain and Whittard of Chelsea into administration.
In the top flight, B&Q owner Kingfisher lost 2.4p to 131.2p and fashion chain Next shed 4p to 1076p, although Marks & Spencer was 1.5p ahead at 214.75p.
Retailers in the second tier fared somewhat better, with Debenhams up 0.5p to 23.5p and Currys owner DSG International adding 0.25p to 17.25p, although Kesa Electricals – which owns Comet – was 1p down at 82.5p.
In the wave of Zavvi’s collapse rival HMV rose 2.75p to 97.75p, although Game Group was unchanged at 120p.
In the top flight, the latest dire economic news saw oil slip to 38 US dollars a barrel on fears over a lack of demand. This knocked back BP 9p to 495.75p, Royal Dutch Shell 29p to 1667p and prospector Tullow Oil 2p to 622p.
Drugs giant AstraZeneca also saw shares come under pressure after fears of potential delays in an application to US regulators over its Seroquel treatment. Astra fell more than 2%, or 59p to 2652p.
But Dairy Milk confectionery firm Cadbury was a gainer after it agreed to sell its Australian drinks business to Japanese brewer Asahi for £550m (€578m). Shares in the firm added 5p to 586.5p.
The leading FTSE 250 riser however was sub-prime lender Cattles, up 12% or 1.25p to 11.75p. The firm was bouncing back from the record lows hit yesterday when Merrill Lynch cut its target price on the firm amid concerns over delays to its banking licence application.
It was closely followed by Yellow Pages directory firm Yell, which added 4.25p to 46.25p.