Profit warning sparks retail nerves

A stark profit warning from Debenhams after a disappointing Christmas period sent its shares tumbling and prompted jitters across the wider retail sector on the year's last day of trading.

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CPP Group sold card protection on behalf of lenders including HSBC and Royal Bank of Scotland

A stark profit warning from Debenhams after a disappointing Christmas period sent its shares tumbling and prompted jitters across the wider retail sector on the year's last day of trading.

The department store chain fell 12% as it said first half pre-tax earnings were likely to tumble by a quarter - after a last-minute festive shopping rush failed to materialise, while discounts ate into margins.

The trading update spread gloom to the likes of Marks & Spencer, which slid 2% to lead the top-flight fallers' board on a day when the wider FTSE 100 Index ended 2013 on a high, climbing 17.8 points to 6749.1 before closing at lunchtime.

It left the benchmark index less than 200 points below its all-time peak during the dotcom boom more than a decade ago, and 14% ahead over the course of the year.

Analysts and investors have predicted London's top flight will crash through the 7,000 level during 2014.

Elsewhere, France's Cac 40 was also in positive territory in the final session of this year while Germany's Dax was closed.

On currency markets, sterling was up one cent against the greenback at 1.65 US dollars and also strengthened by a cent against the single currency to 1.20 euros, amid more data showing UK house price gains.

In London, a trading update for Debenhams for the 17 weeks to December 28 revealed that it missed out on a hoped-for sales surge in the final week before Christmas - meaning more reductions would be on the way in a new year clearance.

Pre-tax profits for the first half of its financial year are now expected to fall 26% to £85 million from £114.7 million the year before, after discounting ate into a paper-thin 0.1% like-for-like sales increase for the 17-week period.

Shares in the FTSE 250-listed group fell 10.2p to 73p.

Investor nerves over the retail sector spread to Marks & Spencer, down 10.1p to 432.6p as well as Next, down 5p to 5450p and Primark owner Associated British Foods, off 25p at 2445p.

Meanwhile, Land Registry figures showing house prices up 3.2% year-on-year - including a surge of more than 10% in London - helped Persimmon climb 2%, or 21p, to 1239p, in the top flight.

The positive sentiment also rubbed off on Wickes owner Travis Perkins, up 24p to 1872p, as well as second tier builder Berkeley Group, up 120p to 2656p, and estate agency group Countrywide, ahead 25.5p to 595p.

Back in the FTSE 100, an admission by Barclays chief executive Antony Jenkins that it could take up to 10 years to rebuild trust in the scandal-hit bank did little harm to shares. They were ahead 0.8p to 272p.

Meanwhile, a clutch of miners were in the red at the end of a turbulent year for the sector on the stock market. Anglo American fell 18.5p to 1320p while Antofagasta slipped 10p to 824p.

The biggest FTSE 100 risers were Aberdeen Asset Management, up 14.8p to 500p, Land Securities up 17.5p to 963.5p, Persimmon up 21p to 1239p and Rexam up 8.5p to 530.5p.

The biggest FTSE 100 fallers were Marks & Spencer, down 10.1p to 432.6p, Sainsbury's down 6.1p to 365p, Anglo American down 18.5p to 1320p and Antofagasta down 10p to 824p.