Shares pressure in the retail sector weighed on the FTSE 100 Index as a mixed session on Wall Street also hit stocks.
High street chains Next and Marks & Spencer led the retail declines as investors reacted to a worse-than-expected update from Sweden’s H&M after a fall in profits due to higher cotton prices.
Trading on the wider FTSE 100 Index was also lacklustre, closing down 4.1 points at 5965.1, following Wednesday’s surge.
Wall Street’s Dow Jones industrial average was struggling to make headway after the US Labour department said the number of workers filing new claims for unemployment benefits unexpectedly surged last week by 51,000 to 454,000. This offset earnings joy from the likes of Caterpillar and Time Warner and affected sentiment in London.
The pound eased back after strong gains on Wednesday following news that two Bank of England policymakers voted for a rate hike in January. Sterling fell to 1.59 dollars and 1.16 euros on Thursday.
Among stocks, Next fell 3%, or 57p to 2028p. The group was followed by rivals M&S down 5.3p to 360.7p and AB Foods off 12p to 1087p as disappointing January retail sales figures from the CBI added to the H&M result.
But BSkyB shares rose 1% as strong half-year results heaped more pressure on Rupert Murdoch’s News Corp to seal a deal for the broadcaster. With BSkyB posting a 26% rise in half-year operating profits to £520 million, shares rose 5p to 762.5p and are well above the 700p proposed by News Corp in the summer before it embarked on its quest for regulatory approval.
Pharmaceuticals giant AstraZeneca failed to hold on to gains, closing down 31.5p to 3042p despite reporting a smaller-than-expected drop in fourth quarter profits of 5% to 2.7 billion US dollars (£1.7 billion). It warned of a challenging few years for the industry, but Astra said it continued to plan for annual revenues in the range of 28 billion dollars (£17.7 billion) and 34 billion dollars (£21.5 billion) over the 2010 to 2014 period.
The biggest Footsie risers were Old Mutual ahead 5.7p to 131.1p, Aviva up 17.6p to 452.5p, Legal & General up 3.3p to 112.8p and Prudential up 20.5p to 704p.
The biggest Footsie fallers were Next down 57p to 2028p, International Consolidated Airlines Group down 7.4p to 270.4p, BAE Systems off 8.4p to 347.2p and Carnival down 70p at 2930p.