Leading shares have lost a chunk of Thursday’s gains, as investors nervously awaited the latest US jobs figures.
But the biggest faller so far was hit by more domestic concerns. Next is down 245p at £75.95 following a survey by BDO showing that the summer was the worst one for retailers for six years.
A downgrade by Exane BNP Parabas from neutral to underperform, with a price target cut by 4% to £74, has not helped matters. The bank is cautious on the outlook for UK consumer spending and has reduced its ratings on a number of retailers including Dixons Carphone, down 11.8p to 419.1p, and Home Retail, 1.8p lower at 146.2p.
But if consumers were not spending in the shops because of the poor weather, that meant they were likely to jet off to sunnier climes, as evidenced by good figures on Thursday from easyJet, up 7p at £17.69, and International Airlines Group, 3p better at 567.5p. Mike van Dulken, head of research at Accendo Markets, said:
Next shares are not at all in vogue this morning – among the heaviest blue-chip fallers - after data from sales tracker BDO showed August was the worst month for the British high street since the global financial crisis with retail sales down a whopping 4.3% year-on-year and contracting for the fourth month in succession. Blame is being pinned on consumers staying at home due to wetter and colder than average summer weather as well as a stronger pound (notably versus the euro) seeing the recent austerity-driven preference for staycations revert to traditional demand for foreign holidays, something the budget airlines easyJet and Ryanair can attest to given their strong passenger numbers published this week.
Overall the FTSE 100 is currently 90.01 points lower at 6104.09 ahead of the US non-farm payroll numbers later, which will be examined for clues as to whether the Federal Reserve will indeed raise interest rates this month or not. The boost given to the markets from the prospect of more quantitative easing from the European Central Bank has proved short lived, as traders focus on the gloomy outlook from ECB president Mario Draghi.
Commodity shares were under pressure again as oil slipped back, with Brent crude down 1.38% at $49.98. BHP Billiton is down 11p at £10.99 while BP has fallen 9.15p to 346.7p.
Elsewhere bwin.party Digital has edged up 0.5p to 115.7p as the online gaming group agreed a £1.05bn offer from GVC Holdings, in preference to its earlier acceptance of a rival bid from 888, down 5p at 157p.
