FTSE falters as retailers slide
Stocks defied downbeat expectations to post gains this morning but have since downhill after a number of UK retailers said sales were falling.
Heavyweight banking stocks are also down following yesterday’s Treasury Select Committee debate over whether to ringfence their operations, and Vince Cable’s attack on their lending levels on Tuesday.
State-backed Lloyds Bank is off by two per cent, followed by sector peers RBS down 1.5 per cent and Barclays lower by 0.9 per cent.
Retailers have been knocked by updates from Argos owner Home Retail Group, which said customers had bought fewer than expected home goods, and JD Sports, which said its sales were continuing to fall.
Marks & Spencer has lost 1.2 per cent and Next is off 0.9 per cent. Supermarket chain Tesco has also fallen by about 0.7 per cent.
On the FTSE 250, Home Retail is down 11.3 per cent while Dixons, JD Sports and Kesa Electricals have also fallen.
However, FTSE 100 energy stocks are providing upward momentum, in line with hikes in the price of oil, following OPEC’s failure to reach agreement on oil supply.
Scottish and Southern Energy leads after gaining 1.2 per cent.
Media giants Pearson and WPP top the risers board, up 1.5 per cent each. New data today forecasts 20 per cent growth in online display advertising this year.
Miner Antofagasta has gained 1.1 per cent, reclaiming losses yesterday and potentially benefiting from the governance storm around rival ENRC.
Life insurers are being bought, with Resolution 1.3 per cent higher and Old Mutual up 1.1 per cent.
European markets have risen this morning ahead of today’s European Central Bank interest rate decision and guidance on Greece’s bailout.
The Bank of England will also report on rates today and while no changes are expected from it or the ECB, a hike in Europe is likely next month so comments from both will be closely watched.