Confidence in high street retailers sagged further yesterday as a number of disappointing updates affected London shares.

Supermarket group Morrisons was the heaviest blue-chip faller on a day when the British Retail Consortium said retailers had suffered their worst Christmas in ten years.

With an equally gloomy set of earnings forecasts hurting sentiment across the Atlantic, London traders found few sources of inspiration and the FTSE 100 Index closed down 22.0 at 4818.7.

Shares in Morrisons fell nearly six per cent, or 12p, to 203p, after it became the latest retailer to fail to impress investors with its Christmas trading.

The company said a 0.1 per cent rise in like-for-like sales in the six weeks to January 9 was little more than acceptable, although its converted Safeway stores had performed well.

Peacock added to the downbeat mood with a profits warning and Topps Tiles also fell after saying it might not be able to sustain recent growth.

The updates were released within hours of the British Retail Consortium (BRC) announcing that high street sales in December were lower than 2003 on an underlying basis.

The BRC dubbed this Christmas the worst for ten years and the outlook on the high street was clouded by uncertainty over the economy and the housing market.

Several top-flight retailers were dragged down by the negative sentiment generated by the survey and the Morrisons update, with Next off 3p at 1600p, and Sainsbury's, down 3p at 266p ahead of Thursday's third-quarter results.

In the FTSE 250 Index, Peacock fell 11 per cent, or 28p, at 243p, and Topps Tiles dropped 7p to 251p after warning it may have trouble keeping up with its fast pace of like-for-like sales growth.

Discount retailer Matalan eased 2p to 224p, despite saying the benefits of a recent overhaul were helping it to overcome difficult market conditions.

Cairn Energy topped the Footsie risers board with a gain of four per cent, or 40p, to 1088p, after saying it had made a gas discovery in Rajasthan and it was looking for more oil and gas nearby.

Builders merchant Wolseley was in the red, down 12p at 971p, after saying it planned to spend £100m on two distribution centres to bolster its UK operation.

Elsewhere, Game Group lifted seven per cent, or 4p, to 66p, as investors expressed relief that a 20.4 per cent sales drop over Christmas had not been worse and that a rapid change in its trading strategy had worked.

Bovis Homes was also on the up after giving the house building sector hope following Monday's downbeat statement from rival Taylor Woodrow. Shares climbed 13p to 584p as it forecast record profits for last year.

One of the day's best performers was Boots, ahead 16p at 662p by the close.