SHARES pressure in the retail sector weighed on the FTSE 100 Index yesterday as a mixed session on Wall Street also hit stocks.

High street chains Next and M&S led the retail declines as investors reacted to a worse-than-expected update from Sweden’s H&M after a fall in profits due to higher cotton prices.

Trading on the wider FTSE 100 Index was also lacklustre, closing down 4.1 points at 5965.1, following Wednesday’s surge.

Wall Street’s Dow Jones Industrial Average was struggling to make headway after the US labour department said the number of workers filing claims for unemployment benefits unexpectedly surged last week by 51,000 to 454,000.

This offset earnings joy from such as Caterpillar and Time Warner and impacted sentiment in London.

The pound eased back after strong gains following news that two Bank of England policymakers voted for a rate hike this month.

Among stocks, Next fell three per cent, or 57p to 2028p. The group was followed by rivals M&S, down 5.3p to 360.7p, and AB Foods off 12p to 1087p, as disappointing January retail sales figures from the CBI added to the H&M result.

But BSkyB shares rose one per cent as strong halfyear results heaped more pressure on Rupert Murdoch’s News Corp to seal a deal for the broadcaster.

With BSkyB posting a 26 per cent rise in half-year operating profits to £520m, shares rose 5p to 762.5p and are well above the 700p proposed by NewsCorp in the summer before it embarked on its quest for regulatory approval.

Pharmaceuticals firm AstraZeneca failed to hold on to gains, closing down 31.5p to 3042p, despite reporting a smallerthan- expected drop in fourth quarter profits of five per cent to $2.7bn (£1.7bn).