Primark’s unsettling update and a profit warning from HMV put the frighteners on retail sector investors and general stores were sharply down against a flat market.

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With the exception of Burberry and Carphone Warehouse, the biggest retailers all fell. Kingfisher and Home Retail, both exposed to the fragile home market, suffered the steepest declines.

However, Carpetright, in the same market, was the week’s biggest climber. Investor Harris Associates upped its stake in the retailer, crossing the 10% threshold.

The grocers were all down in the week that veteran Tesco leader Sir Terry Leahy stood down and rising food prices prompted controversy.

Shore Capital marked the start of new Tesco chief Phil Clarke’s reign with a buy note. The broker said Clarke, a long-standing Tesco director, has “an excellent foundation with which to fulfil the potential

of the Leahy legacy”. Tesco has looked sluggish lately compared wth rivals but Shore maintained: “A new UK board, including imported talent for the first time suggests Clarke is injecting a new stimulus into the UK after two years of market underperformance.”

Online grocer Ocado’s stock was down, following recent share sales by established investors including founder Tim Steiner, but Barclays Capital sees opportunity after a meeting with management. The broker said: “The key messages were that everything is either on track or ahead of the targets set at the IPO, with sales capacity-constrained rather than demand-constrained.”

A profit warning from HMV sent its shares tumbling as investors wrung their hands about its future and wondered whether a break-up might result. Arden was concerned about HMV’s mounting debt and observed: “It is becoming possible that the group will have to sell Waterstone’s and raise emergency equity. It is hard to see any upside out of that and it is possible there is still downside potential in the share price.”

Clinton Cards added to the gloom with plans to put its 14-store Irish business into liquidation. House broker Numis raised its full-year profit forecast from £7m to £7.7m because of the discontinuation of the Irish division and said: “Clinton’s exit should be fairly clean, with no cross guarantees on leases and few cash costs likely to arise as a result of the liquidation.”

There was controversy over the sale of shares by Morrisons founder Sir Ken, but Jefferies rates the grocer a buy. The broker hopes that as much as £500m will be distributed to shareholders through a special dividend or similar scheme. Morrisons reports next week, when Argos-owner Home Retail also updates.