Tuesday morning market opening

Jan 5 2010 By Andrew Mernin

NEXT shares retreated 3% today after the retailer’s cautious comments on prospects for 2010 overshadowed better-than-expected festive trading.

The rest of the retail sector was also weaker after strong gains achieved yesterday on the back of a series of broker upgrades.

The wider London market struggled - down 17.4 points to 5482.7 in the first hour of trading - after breaking the 5500 barrier for the first time in 16 months yesterday.

Financial stocks provided one of the few bright spots of the session, with Royal Bank of Scotland building on last night’s gains to add another 0.8p to 32.9p. Lloyds Banking Group was 0.5p higher at 52.78p, while Aviva topped the insurance sector with a rise of 3.4p to 397.9p.

The retail sell-off was led by Next, which grew like-for-like sales 3.2% in the 22 weeks to December 24 but said it did not expect the next half year to be as good as the previous six months.

Next shares fell 57p to 2082p, while Marks & Spencer dropped 8.2p to 404.2p ahead of its own trading update tomorrow. Sainsbury’s shares fell 4.4p to 319.8p and Tesco dropped 9.05p to 419.35p.