FTSE falls into red as retail stocks suffer

Market report Emma Newlands

The FTSE 100 dipped into the red, as a stronger pound compounded pain from a drop in retail stocks following a string of store closures and profit warnings at some of the UK’S biggest chains.

London’s blue-chip index ended the day down 22.3 points at 7,038.97, with Kingfisher taking the bottom spot.

The B&Q owner, which slipped 36.1p to 301.6p, was among a series of retailers to release a dismal earnings report, as it detailed a 10 per cent drop in profits and warned that the outlook for its UK business was uncertain following a recent hit to sales.

Fiona Cincotta, a senior market analyst at City Index, said: “Retailers dominated the lower reaches of the FTSE as harsh winds continue to blow down the UK high street.”

But she said data released by the Office for National Statistics – which showed a further rise in employment and a 2.8 per cent rise in average earnings in the year to January – gave hope for some relief on the UK high street.

The wage growth data supported the pound, which was up 0.5 per cent against the US dollar at $1.407, and 0.3 per cent versus the euro at €1.147.

In UK stocks, Carpetright shares edged higher by 0.4p to 41p after the embattled firm drew up sweeping restructuring plans.

The biggest risers on the FTSE 100 included Evraz, up 14p at 432.3p, and London Stock Exchange Group, up 114p at 4,150p.

The biggest fallers included WPP ,down36p at 1,110p, and Associated British Foods, down 77p at 2,417p. The embattled retailer said that discussions with its lenders on the terms of its existing financial facilities were “progressing constructively”. The suit hire company slumped after warning on profits for the second time this year, hit by low demand, and slashing its dividend.