Market Report: Another day of discounts for retailers' shares

Retailers winced as the Bank of England signalled there will be no early interest rate cuts yesterday, thereby dashing any hopes of spending picking up in the high street.

There was similar retail gloom in the US after sales in shops fell to their lowest level in five months sending the Dow Jones sharply lower and depressing the mood in London, which was also dosing on a grim rise in unemployment numbers.

UK retailers were led down by Marks & Spencer, 29p off at 266p, Next, 89p off at 990p, and Kingfisher 13p easier at 124p. There was more misery for DSG International – still best remembered as Dixons – which lost 11p at 53p after broker Pali International forecast the shares will sink to 33p. A trading update early next month is unlikely to provide much inspiration for the stock.

Banks also took a tumble, unsettled by JP Morgan 's increased mortgage losses, with HBOS off 24p at 307p, Royal Bank of Scotland 15p down at 229p, and Barclays 27p lower at 351p.

The weakness infected Bradford & Bingley too, which closed a fraction off at 54.75p. With the lender's £400m rights issue due to close tomorrow morning, the underwriters – on the hook at a price below 55p – will be feeling nervous.

The FTSE 100 which had stayed in the red all day finished 85.9 points lower at 5,448.6 having clawed its way back from a low-point of 5,437. The FTSE 250 ended 181.7 points lower at 9,109.5. At the close the Dow was 153 points lower.

Fading bid hopes for ITV sent the shares down 5p at 45p. There has been talk that Endemol, the Dutch television company behind the Big Brother programme, would put the independent television company out of its misery. The shares have lost more than half of their value over the past year.

Heard of Harvey McGrath? Perhaps the market hadn't either because it appeared distinctly underwhelmed after he was anointed as the new chairman of the mighty Prudential in place of city veteran Sir David Clementi. Mr McGrath's efforts will trouser £500,000 a year for his efforts. He worked for Man Group between 1987 and 2007. The shares, which went ex-dividend, were 37p down at 549p.

Pub operator Enterprise Inns picked up the FTSE 100 wooden spoon as the worst performer, down nearly 11 per cent at 342p after recent figures from the British Beer and Pub Association showed beer sales down 2.8 per cent in the year to June.

Poor summer weather can only make matters worse for pub takings and the shares, down 32 per cent in a year, could have further to fall, say dealers who lopped 45p off rival Punch at 323p.

Imperial Energy bounced 93p higher to £11. 37p on growing speculation that it will receive a full bid within days. The company, which produces oil in Russia, is in the sights of two powerful players, China's Sinopec, and India's state owned Oil & Natural Gas Corporation. The lip-smacking prospect of an auction for Imperial is expected to drive the price higher still.

Platinum producer Lonmin came out fighting after the hostile £5bn bid from heavyweight miner Xstrata. Lonmin rubbished the offer claiming Xstrata was trying to get it on the cheap, pointing to the 100-year life of its mines and low cost of production

One analyst thought Lonmin was providing very little new information and that Xstrata would eventually win the day although it would need to bump up its £33 a share offer. Lonmin ended 6p higher at £34.10p. Xstrata, which would become the world's third-largest supplier of platinum if it succeeds, was 81p up at £29.64p as renewed appetite for miners saw Anglo American top the FTSE 100 leaderboard with a 112p rise to £27.91p while Vedanta gained 51p at £17.50p.

Outsourcing group Mears came off the boil slightly after a downgrade to hold from buy from Altium Securities which feels the price has moved ahead a little too enthusiastically of late. In fact, it is up 20 per cent in the last month – some doing in these conditions. The price finished 2p easier at 297p.

Marchpole, the fashion brand business fell 11 per cent to 13p after the departure of finance director John Macaulay. The shares have fallen 90 per cent in a year. The firm said he would leave on 11 September. The company recently reported a full-year loss of £6.1m compared with a profit of £6.3m last year.

Not a great time to be coming to the stock market but Molectra, formerly known as Greenhouse Fund, made a quietly confident debut ending unchanged at 6.6p. The firm's main business is in Australia where it recycles old motor car tyres and uses the rubber for a range of moulded rubber products.

Kurawood, the softwood business, plummeted 54 per cent to 24p after announcing plans for refinancing the business. The directors will work without pay in the meantime.