By Simon Kennedy, MarketWatch

LONDON (MarketWatch) -- Stocks in London fell Thursday, led lower by Tesco PLC as the retailing giant issued a disappointing sales update.

By contrast, Home Retail Group PLC rallied after the firm's strong performance over Christmas.

The benchmark FTSE 100 index slipped 0.4% to 6,023.88.

Stocks showed little reaction to the Bank of England leaving interest-rate policy and its asset-purchase program unchanged, as expected.

"We have seen blue-chip shares in London firmly knocked back today, as the retail reporting season has continued," said David Jones, chief market strategist at IG Index. "After some better-than-expected results from high street favorites this week, the latest numbers from Tesco have proved disappointing."

Tesco's shares dropped 4.3%, pressured after the world's third-largest retailer said recent bad weather in the U.K. caused disruption for customers trying to reach its larger stores.

Total sales in the six weeks to Jan. 8 rose 7.6% excluding fuel, but comparable U.K. sales were up just 0.6%, the company said.

Jefferies International analyst James Grzinic said in a note to clients that Tesco's comparable sales growth has lagged behind other supermarkets over the Christmas period, mainly due to a much stronger performance from J Sainsbury PLC .

Shares of Sainsbury ended down 0.1% Thursday.

Big moves for specialty retailers

Among several other smaller retailers that also provided Christmas trading updates, Dixons Retail PLC took a knock, its shares slumping 10%. The electrical-goods chain reported decreases of 2% in comparable sales for the group and 4% for its U.K. business.

Home Retail , on the other hand, jumped more than 10%. Pretax profit for the year should still hit the middle of its previously announced range pegged at 250 million pounds ($394 million) to  £275 million, the company said.

Seymour Pierce analyst Freddie George said that Home Retail didn't appear to have been hurt by the bad weather and that decreasing sales for its Argos division were less severe than expected.

Game Group PLC was another standout performer, surging nearly 16%. The computer-game retailer said sales trends are continuing to improve.

In addition, Game Group said it will provide a strategic update in February on how the company will adapt to innovations including social and mobile gaming as well as the growth in digital distribution.

Also Thursday, there were several other big movers in London outside the retail sector.

Shares of Provident Financial PLC jumped 11% after the door-to-door lender entered into a new  £100 million loan facility, which analysts said removes short-term funding concerns.

Filtrona PLC rallied 9.7% after appointing a new chief executive and saying revenue for the year was up around 10%. Panmure Gordon upgraded the specialty plastics supplier to buy from hold following the statement.

In other sectors, mining stocks edged down after their recent strong gains.

Rio Tinto PLC (RIO) shares slipped 0.9%. The group's Alcan division declared a force majeure event as the flooding in Australia cut off aluminum supplies from one of its smelting facilities.

Copper miner Antofagasta PLC fell 2%.

Losses for the miners were partly offset by gains for most banks as the sector rallied across Europe following successful government bond auctions in Spain and Italy.

Shares of Royal Bank of Scotland Group PLC (RBS) rose 3.5% and Lloyds Banking Group PLC (LYG) climbed 1.2%.