London’s top indexes struggle for direction on tame day in City

London’s top indexes struggled to squeeze out any gains today on a tame day of trading in the City.

The capital’s premier FTSE 100 index edged 0.09 per cent higher to 7,467.38 points, while the domestically-focused mid-cap FTSE 250 index, which is more aligned with the health of the UK economy, fell 0.52 per cent to 20,893.19 points.

Retailers held the FTSE 100 back, led by Next posting the biggest fall on the index, dropping 3.26 per cent.

Investors responded badly to the high street retailer announcing prices will rise eight per cent this autumn to account for higher costs.

Staff shortages and disruption caused by the Russia-Ukraine war have squeezed the firm’s margins, prompting traders to ditch their holdings.

Fellow retailer JD Sports added to the sector’s woes, tumbling 2.61 per cent. FTSE 250-listed Marks and Spencer was among the worst performers.

Concerns about businesses’ capacity to withstand strong inflationary pressures and remain profitable weighed on overall market sentiment, analysts said.

“Brent Crude oil at $122 per barrel is going to be a tough one for businesses to stomach as energy costs go through the roof,” Russ Mould, investment director at AJ Bell, said.

“The cost of running factories, moving trucks and powering computers will put a squeeze on profit margins which means corporate earnings expectations may have to be reduced unless we see a significant reduction in inflationary pressures,” he added.

European shares were also muted, with Germany’s Dax 30 closing slightly lower.