DSG International extended a rebound on Thursday after the retailer played down rights issue speculation.
In a meeting with Credit Suisse, DSG chief executive John Browett was optimistic that store refits and wider product ranges had helped stabilise trading.
If the Currys and PC World owner can make it through the current difficult year intact, the new store strategy can provide a foundation for recovery, he said.
Credit Suisse analysts saw management delivering a similar message at a strategy presentation next month. This “could give credibility to a swing in view from an unsolvable position to a more balanced medium-term view of prospects”, the broker told clients.
DSG closed 11.8 per cent higher at 26p. The stock has rallied from below 10p in December in spite of talk it might tap investors for more than £200m once it has completed the sale of its overseas subsidiaries.
The FTSE 100 finished down 0.8 per cent to 4,202.24, losing 32.02 points.
Life insurers sank on news the Financial Services Authority was requesting sensitivity analysis on their solvency levels.
Legal & General was down 7 per cent to a 14-year low of 54.7p as the FSA’s move stoked worries of a dividend cut and capital raising.
Prudential was off 5.9 per cent to 328p and Aviva lost 4.1 per cent to 364¼p.
Miners were lower after Rio Tinto’s $19.5bn cash injection from Chinalco.
“We feel China is effectively gaining control of key resources, raising the risk of undue influence on the commodities pricing mechanism,” said SocGen, while Cazenove called the terms “shocking, with greater levels of asset control given up than expected for lower value than expected.”
BHP Billiton, which has been mooted as a more industry-friendly buyer for Rio’s iron ore assets, lost 2.8 per cent to £12.58. Anglo American fell 3.9 per cent to £13.24 and Xstrata was off 3.1 per cent to 732p.
Rio itself finished 1.5 per cent lower at £19.39, having lost as much as 18.5 per cent in the session.
BT Group lost 7.8 per cent to 97p after guiding down cashflow forecasts for its next fiscal year. A £1.7bn pension deficit also disappointed, heightening concern BT will cut its dividend once a triennial pension review completes in May.
British Land led the property stocks lower after announcing a £740m rights issue to strengthen its balance sheet.
“We believe that Liberty International and Segro could be next to come to the market,” said Exane BNP Paribas. British Land fell 5.6 per cent to 456¼p, while Liberty was down 4.2 per cent to 362½p and Segro lost 4.7 per cent to 141½p.
InterContinental Hotels was down 6.3 per cent to 498½p after Marriott International cut guidance, while Inmarsat lost 6.4 per cent to 405½p on a theory that a collision between US and Russian satellites would drive up industry insurance rates.
Meanwhile, among the mid-caps, Dairy Crest rose 0.8 per cent to 250p amid cash call talk.
“We believe investors are rightly concerned about Dairy Crest potentially breaching one of its main debt covenants,” said Matrix analyst Pieter Vorster, who kept “buy” advice. “It would be sensible for Dairy Crest to raise £75m of new equity and reduce its dividend.”
Northern Foods rose 7 per cent to 57⅓p after Goldman Sachs added the stock to its “conviction buy” list.
Engineers were under pressure after Terex, the US maker of construction equipment, said 2009 sales may fall up to 35 per cent and warned it could default on debt covenants.
GKN, down 4.7 per cent to 81¾p, also suffered after its deletion from MSCI’s global index. National Express, down 3.3 per cent to 297p. also lost its place in the benchmark, while Autonomy, up 3 per cent to 12.34p, was a new addition.
Chloride edged up 0.7 per cent to 152¼p as gossip about a potential bid from Emerson Electric was given yet another outing round the trader message boards.
Data warehousing group Telecity sank 6.8 per cent to 186p after Equinix, a US peer, cut sales guidance to reflect weakness in its home market. Equinix also said it had gained share in Telecity’s key markets and would be spending about a third of its 2009 budget in Europe.
