It could pave the way for Next to return to Dumfries - a town it quit after a lengthy planning row.Read more
The FTSE 100 is down 1% at 7,665.93.
Next's shares have extended earlier falls and are now down 6.7% at £55.37.
The retailer is followed by the mining group Rio Tinto, whose share price is down 4% at £40.25.
Rio Tinto reported underlying profits up 12% over the interim period but at $4.42bn, income was below forecasts of $4.53bn.
Packaging specialist Smurfit Kappa led the FTSE 100 risers, up 2.1% at £31.99 after reporting strong first half results.
The FTSE 250 is down 0.35% at 20,805.11.
BBC Business News
Shares in clothing retailer Next have slumped this morning - despite the Leicester firm reporting a faster-than-expected rise in sales over the past few months.
Next said the hot weather had helped it sell more lightweight summer clothing earlier in the year than usual.
But the retailer resisted upgrading its full-year profit forecast, saying it had already sold much of the stock it had been expecting to sell in August.
Looking further into Next's trading update, Hargreaves Lansdown equity analyst George Salmon, says: "It’s also notable that Next’s strong quarterly performance has come online, rather than in-store.
"The vast chasm between the two sides of the business further underscores click’s dominance over bricks, and dents any hopes high street retailers may have been harbouring that the hot weather would transform sales figures by enticing more shoppers to get out and about.”
Next's share price is still down nearly 6% and, according to George Salmon, equity analyst at Hargreaves Lansdown, this is why:
"Hopes had been high that the sunny weather, which boosts sales of all things summer season, would have led to Next upgrading profit expectations for the year. That’s not been the case.
"Next says it’d rather wait and see how the remainder of the summer goes before moving guidance. This seems fair enough, but it will have left a few wondering if the best summer in years isn’t enough to upgrade profits, then what is?"
Investors sent Lloyds Banking Group's share price 2.1% higher to 63.59p after it reported better than expected profit for the first six months of the year.
Meanwhile, Next's share price tumbled 5.73% £55.96 following a trading update which revealed a sharp fall in sales at its shops.
Welcome to Business Live and the first day of August.
The first of the major UK retail banks - Lloyds Banking Group - will report its interim figures at 7.00am. It will be followed by Barclays on Thursday and RBS on Friday.
Defence giant BAE Systems will show investors on its latest financials this morning as will high street retailer Next which will publish a trading update.
Later on Tesla - the electric carmaker headed by Elon Musk- will reveal figures. After Tesla asked suppliers for refunds, its shareholders will be asking a lot of questions.
The Federal Reserve is holding its rate-setting meeting but no change is expected.
As always, we'd love to hear from you. Email us at email@example.com
The FTSE 100 is up 30.01 points, or 0.39%, at 7,647.71.
Retail chain Next is leading the blue chip risers with its share price up 2.6% at £59.53.
Telecoms group Vodafone is the biggest faller, down 0.98% at 189.13p.
The FTSE 250 is up 123.57 points, or 0.60%, at 20,741.91.
BBC Business News
Could Next defy the High Street slowdown this year? The Enderby-based fashion retailer has upgraded its full-year profit forecast after reporting a rise in first-quarter sales, helped by the warm spring weather.
It now expects a full-year pretax profit of £717m - up from previous guidance of £705m.
The firm, which had been hit by a dip in consumer confidence, saw sales climb 6% in the three months to 7 May, although much of the growth was online.
E-commerce sales jumped 18%, while high street retail sales slipped 4.8%.