High street horror show hits retail stocks in UK
British shares fell on Wednesday as Kingfisher and Moss Bros piled more bad news on a UK retail industry reeling from the surge in ecommerce.
Share declines accelerated after data showed British workers' pay had risen at the fastest pace in nearly two and a half years. That pushed up the value of the pound and hit shares in big multinationals and exporters.
Any end to the long squeeze on UK household incomes was not showing through in the retail industry on Wednesday, however.
Formal clothing chain Moss Bros lost a fifth of its market value after a profit warning. Home improvement chain Kingfisher also reported a recent deterioration in trading.
The FTSE 100 index was down 0.53pc at 1028 GMT, with Kingfisher falling 8pc to its lowest level since November. Among other retailers, clothing chain Next was down 1.2pc and Primark owner ABF fell 1.1pc.
UK retailer shares have tumbled 9pc this month, outpacing a 3pc drop in the wider FTSE 350 index. The retail index is at its lowest since the aftermath of the Brexit vote.
Underscoring the increasing power of online retail, US ecommerce giant Amazon overtook Google owner Alphabet by market value on Tuesday.
World shares were flat on Wednesday and the dollar eased off three-week highs as investors marked time before a likely hike in US interest rates and awaited guidance on how many more to expect for this year.
Markets are on edge, not only because of the US Federal Reserve meeting which should deliver the first rate rise of 2018, but also because of a selloff in US tech shares, which has wiped almost $50bn (€40.7bn) off the value of Facebook this week amid uproar over the alleged misuse of users' data.
The Facebook losses have filtered through other tech shares in the United States and overseas, with shares in Twitter falling more than 10pc on Tuesday. A major overhang for financial markets is the spectre of a global trade war.
US President Donald Trump is expected to unveil up to $60bn in import duties on Chinese goods by Friday, after imposing tariffs on imported steel and aluminium earlier this month. Investors are worried his actions could escalate into a full-blown trade war if China and other countries retaliate with similar or harsher measures, threatening global growth.