By This Is Money Reporters
The FTSE 100 slid 16.2 points to 6,739.3 as traders digested the latest round of Christmas updates from the retail sector.
Fallers included Sainsbury’s as a better-than-expected 0.2 per cent rise in underlying sales for the Christmas quarter was offset by its warning that like-for-like sales for the whole year will be lower than hoped.
Shares initially rose 3 per cent but were later 5.5p lower at 363.3p. Read more here.
Economy watch: A flood of reports including key US jobs data are due out this week
Rival Tesco, which reports figures tomorrow, fell 3.3p to 328.45p and Debenhams dropped 1p to 75.85p following its profits warning last week.
Marks & Spencer bucked the trend as its shares rose 3.5p to 444.65p on the eve of its eagerly-awaited trading figures.
Outside the top Footsie index, Mothercare shares took a hammering as it became the second major retailer to warn that it will miss profit expectations.
The babycare products chain said UK quarterly sales were 9.9 per cent lower because of fierce competition over Christmas and the impact of recent store closures on year-on-year comparisons.
With currency deflation also impacting its overseas business, shares slid by 31 per cent or 131p to 289p as it warned that full-year profits were likely to be below the current range of City expectations. Read more here.
Elsewhere, shares in RSA Insurance continued their recovery on hopes that an independent report expected on Thursday will rule out the need for any more write-downs in its troubled Irish business. Shares were 2.3p higher at 100.1p.
The FTSE 100 has opened down 2 points at 6,753.4, as investors wait for fresh signs that key economies are picking up before committing more money to stocks.
Recent strong economic figures from Germany have raised market expectations before the release of its trade balance and industrial orders data, both forecast to show an increase in November.
The eurozone unemployment rate and US private-sector hiring data are also due out today, while the US Federal Reserve will release minutes of its last meeting after the close tonight.
The Bank of England and European Central Bank’s first interest rate decisions of the year are scheduled tomorrow
But probably most influential for markets will be the the US non-farm payrolls jobs report for December, due this Friday.
Craig Erlam of Alpari said: ‘We have seen a pickup in activity over the last couple of days, as traders return to their desks following the winter break, but trading volumes have still been a little lower than normal due to the large number of high volatility events scheduled for the end of the week.
‘Well things should pick up more today, with a number of important pieces of economic data due to be released, followed this evening by the FOMC [Federal Open Market Committee] minutes.
The FTSE 100 closed 24.72 points higher at 6,755.45 yesterday, helped by gains in financial stocks.
Brent crude held its ground above $ 107 per barrel, supported by new worries over Libyan supplies and expectations of another drop in US crude inventories. Gold is at $ 1,226.30 an ounce.
Stocks to watch today include:
J SAINSBURY: The supermarket posted a small rise in underlying sales in its Christmas quarter, though its rate of growth slowed.
LLOYDS BANKING GROUP: A mass sell-off of the government’s 33 per cent stake in Lloyds Banking Group has moved a step closer.
The management of the bailed out bank was asked by UK Financial Investments, which looks after taxpayers’ shares, to draw up the detailed information needed for a sale, the Guardian newspaper and Sky News reported.
SSE: The energy supplier will cut its prices in response to a government pledge to remove some taxes and social charges from bills by the end of the current financial year, later than most of its rivals.
ASTRAZENECA: The drugmaker has signed a deal with private biotech company Immunocore to boost its experimental cancer drug pipeline as it seeks to find new medicines to replace those going off patent.
GLENCORE XSTRATA: The company’s Pasar copper smelter in the Philippines plans to restart as soon as January 15, after being damaged by Typhoon Haiyan in November, two sources said.
MOTHERCARE: The mother and baby products retailer warned that annual profit would be below current market forecasts, hit by Christmas discounting in Britain, plus weak economic conditions and currency deflation overseas.
PERSIMMON: The housebuilder said full year revenues jumped 21 percent.
BAE SYSTEMS: The company chose Jerry DeMuro to head its US business, pinning its hopes on the former General Dynamics executive to steer the weapons maker through military cuts that are expected to bite over the next decade.
FERREXPO: The Ukrainian iron ore miner said its iron ore pellet output rose to a record high for the company in 2013 even as production fell slightly in the last quarter of the year.