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London Market Report London Market Report
(about 5 hours later)
(Noon): Next dragged the market lower after it warned that the recent spell of warm weather had hit its sales. (Close): Next dragged the market lower after it warned that the recent spell of warm weather had hit its sales.
Shares in Next fell 4.3% as it added that if the mild weather continued through October it might have to cut its full-year profit forecast. Shares in Next closed down 3.8% as it added that if the mild weather continued until the end of October it might have to cut its full-year profit forecast.
It said the "unseasonably warm weather" in September meant third quarter sales growth would be about 6% compared with forecasts of 10%. The unexpected news hit shares in rivals, with M&S and Debenhams both closing 2.6% lower.
The news hit shares in rivals, with M&S dropping 2% and Debenhams down 1.7%. The benchmark FTSE 100 index closed down 23.88 points at 6,622.72.
The benchmark FTSE 100 index was down 4.43 points at 6,642.17. "Next does not often lower guidance. So the fact that they have said they may do so due to the warmer weather is hitting the shares," said Securequity sales trader Jawaid Afsar.
The market was unmoved by news that the UK economy grew by 0.9% in the second quarter of the year, faster than the previous estimate of 0.8%. Royal Bank of Scotland jumped 1.9% to 368.20p after the bank said that improving economic conditions meant it had cut the amount of money it has set aside for bad debts.
Royal Bank of Scotland was up 2.5% to 370.50p after the bank said that improving economic conditions meant it had cut the amount of money it has set aside for bad debts. Other movers on the market included Primark owner Associated British Foods, which rose 4.5%, to 2,679p after Credit Suisse raised its rating on the stock to "outperform".
Other movers on the market included Primark owner Associated British Foods, which rose 96p, or 3.75%, to 2659p after Credit Suisse raised its rating on the stock to "outperform". Saga shares rose 1.5% to 174.80p after its latest results. Pre-tax profits in the first half of the year fell 64% to £32.8m, mainly because of a £50.8m charge from its stock market flotation in May.
Saga shares rose nearly 1% to 173.80p after its latest results. Pre-tax profits in the first half of the year fell 64% to £32.8m, mainly because of a £50.8m charge from its stock market flotation in May.
Despite the latest increase, the firm's shares are still well below their flotation price of 185p.Despite the latest increase, the firm's shares are still well below their flotation price of 185p.
On the currency markets, the pound fell 0.39% against the dollar to $1.6179 but jumped 0.43% against the euro to 1.2859 euros. On the currency markets, the pound fell 0.14% against a rallying dollar to $1.6219, hitting a two-week low. But it jumped 0.32% against the euro to 1.2845 euros and remaining at a two-year high.
The dollar has been enjoying strong gains against most major currencies recently as prospects for the US economy improve. The dollar has been enjoying strong gains against most major currencies recently as the prospects for the US economy improve.
However, the euro has been suffering from the poor economic news emerging from the eurozone. Latest figures show eurozone inflation slowed to 0.3% in September, well below the European Central Bank's target of just below 2%. However, the euro has been suffering from the poor economic news emerging from the eurozone. Figures published on Tuesday show eurozone inflation slowed to 0.3% in September, well below the European Central Bank's target of just below 2%.