The FTSE 100 slipped modestly lower to 7,174 as Next's cautious outlook hit investor confidence in the retail sector.
The British Retail Consortium reported that shop prices declined by 1.4% in December, which was a lower fall than the 1.7% fall reported for the previous two months.
West Texas Intermediate and Brent crude oil slid 0.3% higher to $52.47 and $55.62 per barrel, respectively.
Gold rose 0.3% to $1,164 per ounce and copper was stable at $5,467 per tonne.
FTSE 100 RISERS AND FALLERS
Fashion retailer Next (NXT) issued a profit warning causing the stock to fall 9.6% to £43.13. The company reduced profit guidance for the year to January 2017 from the previous range of £785m to £825m down to £792m due to weak Christmas trading. It also warned that sales in the next 12 months will be affected by a squeeze in consumer spending.
The bad news hit rivals Marks & Spencer (MKS) by 4.2% and Primark owner Associated British Foods (ABF) by 3.3%.
FTSE 250 RISERS AND FALLERS
B&M European Value Retail (BME) fared better as third quarter revenue rose by over a fifth to £789.1m as a result of record Christmas sales. The shares gained 7% to 296.8p.
Housebuilder Bovis Homes (BVS) slipped 2.5% after broker Jefferies moved its recommendation on the company from 'buy' to 'hold'.
Emergency power provider Aggreko (AGK) won a $450m contract to supply power to the Olympic Winter Games in South Korea in 2018.
The market was unimpressed by Ultra Electronics' (ULE) £9.7m contract extension for the supply and production of sonobuoys for the Royal Navy's Merlin Mk2 maritime patrol helicopter fleet.
SMALL CAP RISERS AND FALLERS
Shares in budget airline Ryanair (RYA) failed to take off despite reporting a 20% increase in passenger numbers in December.
Brand protection tech developer Spectra Systems (SPSY) soared 39% to 35.5p on an optimistic trading update. The company reported it expects profits to significantly exceed market expectations, which was driven by improved margins.
FastForward Innovations (FFWD) announced its investee company Vested Finance received a takeover offer, prompting a 19.5% rally in the stock.
Gas storage firm Infrastrata (INFA) crashed 15.3% to 0.5p as the board indicated it will need to consider if the company can continue as a going concern if it cannot secure short-term funding in January.
Meat packing business Hilton Food (HFG) signed a joint venture agreement with Portugal retailer Sonae Modelo for the supply of packaged beef, lamb, veal and pork products to its stores. The stock fattened 5% to 677.5p.