Fears over the future of Currys and PC World swept the market today after a downgrades from its house brokers sparked a massive shares sell-off.

Shares of the DSG International, owner of the high street retailers, plunged to new low of 11p, down 31 per cent, after analysts at Citibank cut their target prices, while JP Morgan questioned the company's ability to survive the economic downturn in its present form. Shares briefly touched record lows below 10p.

A spokesman for the company said: “We know of no reason for the share price fall. We will update the market when we release our interim results next Thursday”.

Alix Turner, analyst at JP Morgan, which is DSG's joint house broker with Citibank, said: “We expect the results to look very poor and give little support for those concerned about the group’s prospects to survive the downturn.”

Citigroup analysts slashed their target price for the stock to 18p from 30p. They wrote: “DSG is very materially impacted by the current cyclical slowdown/recession”.

Last week DSG was hit when insurers withdrew some of the cover they offered to suppliers against the company’s collapse. The partial withdrawal of trade credit insurance meant DSG was likely to face less favourable terms from suppliers.

Neil Saunders, consulting director of Verdict, the retail analysts, said: "Electricals is one of the sectors that bears the brunt of the slowdown when it gets serious because most people can defer purchases."

He added: "DSG isn't optimally positioned, with store standards quite low and service not as good as it could be."

John Browett, DSG chief executive, recently admitted that improving standards of service was his main priority.

DSG, which has been left railing by the housing slump and the decline in consumer confidence, is also facing fresh competition from Best Buy, the giant American electrical retailer.

Investors were also alarmed by the near-collapse of Circuit City, the United State’s second largest electrical retailer. It filed for bankruptcy protection last week.

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