The new year rally on the FTSE 100 proved shortlived as ongoing fears over the eurozone debt crisis returned to haunt London’s leading shares index today.
The Footsie lost hold of earlier gains after a strong 2% surge on Tuesday to close 31.5 points lower at 5,668.5.
Sentiment was hit by disappointing data from Europe and a weak show for retailers, triggered by a disappointing update from fashion giant Next.
The change in mood was reflected in the appetite for risk, with safer haven stocks such as Severn Trent – up 17p to £15.37 – doing well.
Other big risers on the Footsie included United Utilities up 9p at 620.5p, Serco ahead 6.8p at £4.90 and Barclays 2.1p better off at 188.4p.
Among the heavy fallers were Glencore down 31.5p at 5668.5p, Schroders off 39p at £13.15 and BAE Systems 8.3p lower at 286.6p.
Next suffered a rare backlash from investors after admitting its festive trading performance was disappointing.
It was one of London’s best performing stocks during 2011 but fell 3%, or 85p to £26.56 today after it said store sales in the run-up to Christmas were down 2.7% year-on-year.
Marks and Spencer, which posts figures next week, fell 8.2p to 308.8p and B&Q owner Kingfisher shed 1.2p to 248.8p.
At the start of a busy few days for retail updates, shares in a number of FTSE 250 retailers were also under pressure.
WH Smith was 20.5p lower at 517.5p, a drop of 4%, while Argos owner Home Retail Group slipped 3.3p to 90.95p and Greggs fell 7p to £5.19
By contrast, Domino’s Pizza gained 7%, or 27.7p to 441.5p after it posted a further batch of strong sales figures.
Barry Shepherd, of investment manager and financial planning specialist Brewin Dolphin in Aberdeen, noted Dundee-based Alliance Trust off 0.9% at 346.95p, temporary power specialist Aggreko 1.8% lower at £20.26 and Faroe Petroleum shedding 1.9% to 156.5p.
But Premier Oil added 3.2% to 376.55p and Plexus Holdings closed 4.5% higher at 81.5p.