THE country's Indian summer gave Next a cold shower as the fashion retailer was forced to downgrade its full-year profits and sales guidance.
Marks & Spencer and Next shares were both lower, while sentiment elsewhere in the retail sector was hit as shares in B&Q owner Kingfisher and electricals business Dixons Carphone also fell. But the sell-off was offset by improved sentiment in the wider market as the FTSE 100 Index climbed for a second session in a row, by 51.7 points to 6453.9.
It followed a rise in Asian markets as the mood was buoyed by expectations that the US Federal Reserve was about to signal that it was in no hurry to raise interest rates. On currency markets this sent the pound slightly higher, at 1.61, against the US dollar but against the euro it was slightly lower at 1.26.
Commodity-based stocks were again behind London's rally as Randgold Resources lifted 44p to 4021p and Glencore rose 4.25p to 323.7p.
Next's warning that the mild autumn weather had produced a less than sunny outlook for its bottom line meant its shares fell 20p to 6415p. Sales of jumpers and coats have been hit by the Indian summer and the group said its full-year profits would be £25million lower than expected at £770m. Many analysts had already factored in the decline after a previous warning in September.
Next's retail rivals joined it on the fallers' board as investors weighed up how the weather warning would hit their performances.
Marks & Spencer, which reports half-year results next week, slipped 2.6p to 404p, and Primark owner Associated British Foods eased 2p to 2740p.
Superdry fashion chain SuperGroup was 33p lower at 889p on the FTSE 250 Index fallers board, while elsewhere in the retail sector Kingfisher was 0.4p cheaper at 295.3p and Dixons Carphone fell 1.7p to 390.4p.
Capita was the biggest faller in the top flight after it was not named as preferred bidder for 21 Ministry of Justice criminal probation service contracts worth around £450m. Shares fell more than six per cent, or 75p to 1082p. Shares in pensions group Standard Life were slightly lower - off 1.2p at 384.1p - after it said it attracted £4.3 billion in net new assets in the nine months to September 30, taking the total to £290bn. It also said it gained 290,000 customers as a result of pensions auto-enrolment.
Among the risers Thomson holidays firm TUI Travel rose after shareholders voted to approve plans to merge with its German parent company to create the world's largest tour operator. Shares were up more than three per cent, or 12.7p, to 395.4p.
The biggest risers on the FTSE 100 Index were Intertek up 131p at 2709p, TUI Travel up 12.7p at 395.4p and IMI up 30p at 1204p. The biggest fallers were Capita down 75p at 1082p, Royal Mail down 15.6p at 437.7 and International Consolidated Airlines Group down 9.8p at 385.2p.
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