FTSE closes down as retail and bank stocks struggle

The FTSE 100 fell 75.17 points, or 0.98% to end the day at 7576.59.

Shares closed down in the City on Thursday (Nick Ansell/PA) (PA Archive)

London’s FTSE 100 continued on what has so far been a pretty miserable start to the year for the blue chip index.

Marks and Spencer led the index lower after it did not update its full-year guidance despite what one analyst called a “solid” set of figures in the third quarter.

“While the retailer was able to deliver a 10.5% increase in sales for its food business and serve a record number of customers, it also warned of the effects of higher than anticipated wage and business rate costs,” said Michael Hewson at CMC Markets.

The FTSE 100 fell 75.17 points, or 0.98% to end the day at 7576.59. It means that in the year to date the index has given back about 2% of its value.

“It’s been a negative session for markets in Europe with the FTSE 100 once again struggling for gains, slipping to three-week lows in the wake of the US CPI reading, and some warnings about fourth quarter bank results,” Mr Hewson said.

Barclays and Lloyds banks were both in the bottom five performers on the FTSE during the day.

“The banking sector has proved to be the main laggard with today’s weakness accelerating in the wake of warnings from Barclays that the final three months of this year were challenging for its investment banking division due to a lack of volatility.”

By the close of play Frankfurt’s Dax index fell 0.88%, while the Cac 40 in Paris had ended down 0.57%.

In New York, a little after European market close, the S&P 500 was trading down 0.69%, while the Dow Jones was 0.53% lower

On currency markets, the pound was trading 0.15% lower against the dollar at 1.2724 and had risen 0.00% against the euro at 1.1613.

In company news Tesco said that its profits are likely to be higher than previously expected after it tried to keep customers from switching to rivals Lidl and Aldi.

The company said that like-for-like retail sales had risen 6% in the six weeks to January compared to a year ago.

Retail-adjusted operating profit is expected to reach £2.75 billion in the year, up from a previous forecast of £2.60-2.70 billion.

However, shares in the company closed down 1.27%.

Elsewhere, Premier Inn owner Whitbread said that its accommodation sales rose 11% in the three months to the end of November.

The hospitality company said that it is doing better than other low-cost rivals. Shares rose 2.34%.

The biggest risers on the FTSE 100 were: Whitbread, up 82p to 3,632p; Rentokil, up 6.1p to 420p; Diageo, up 28p to 2,815.5p; Anglo American, up 16.6p to 1,839.8p; and BAE Systems, up 8p to 1,163.5p.

The biggest fallers on the FTSE 100 were: Marks & Spencer, down 14.4p to 263.3p; Barclays, down 7.06p to 145.58p; WPP, down 30.4p to 729p; Rolls-Royce, down 12.2p to 297p; and Lloyds, down 1.75p to 45.24p.