Ashley sparks sell-off as topflight wavers

Market report Emma Newlands

The FTSE 100 struggled for direction as traders adopted a “wait and see” approach amid further Brexit fallout and as Sino-us relations continue to come under the microscope.

London’s top flight closed down 2.69 points at 6,877.5 as investors suffered a bout of Brexit fatigue following the high drama of earlier in the week. Traders were also cautious over reports that China and the US are making more progress on trade talks following acrimony between the two global superpowers.

“Despite a move higher on the open, the index steadily edged lower across the morning, under the pressure of a stronger pound. It was not until Wall Street opened higher that the FTSE showed any interest in moving back into the black,” said City Index analyst Fiona Cincotta.

Theresa May’s survival of a no confidence vote acted as a mini boon for the pound, which has retreated from multi-month lows and was trading broadly flat at the London market close. Sterling was up marginally versus the US dollar at $1.263 and rose 0.2 per cent against the euro to hit €1.113.

In stocks, Mike Ashley’s loose tongue triggered a sell-off in both Sports Direct and Debenhams, which closed down 40.9p at 235.4p and 0.28p down at 5.45p respectively. The tracksuit tycoon warned that November trading at Sports Direct had been “unbelievably bad” as profits took a hit from the acquisition of House of Fraser. He also claimed Debenhams, where Sports Direct is the largest shareholder, is on the brink of collapse as he urged the struggling retailer to accept his offer of a £40 million loan to avoid a Christmas disaster. The outsourcer bucked trends in the sector by confirming that it remains on track to hit recently raised profit forecasts for the year. The womenswear chain saw its shares crash after warning it could slip to a £4 million annual loss amid “unprecedented” tough trading conditions.