London open: Stocks edge lower amid deluge of retail updates

Stocks in London edged lower in early trade as investors sank their teeth into a deluge of corporate releases, with retailers in focus following updates from Marks & Spencer, Tesco, Primark owner Associated British Foods, JD Sports, and Debenhams, among others.

At 0830 GMT, the FTSE 100 was down 0.2% to 7,275.46. Meanwhile, oil prices were little changed, with West Texas Intermediate up 0.1% to $52.30 a barrel and Brent 0.4% firmer at $55.33.

Spreadex’s Connor Campbell said: “The FTSE stumbled out of the gate this Thursday, despite a wave of surprisingly strong Christmas updates from the UK’s key retailers.

“Falling 0.3% after the bell, the FTSE dipped away from the post-7,300 highs it struck during yesterday’s trading, in part hampered by a the pound’s half a percent rebound against the dollar. A lack of economic data meant that the morning’s main focus was on the cavalcade of trading statements sent out before the market opened.”

Marks & Spencer rallied as it said third-quarter revenue rose, with investors particularly pleased that its embattled clothing division saw sales growth for the first time in nearly two years.

JD Sports Fashion surged as it said headline pre-tax profit for the current financial year is likely to be ahead of consensus market expectations of £200m by up to 15%.

Department store Debenhams advanced after saying like-for-like sales rose 5% in the seven-week Christmas period.

Clothing retailer Supergroup pushed higher as it reported that interim group revenue rose 31.1% to £334m, with retail revenue up 25% in the period.

Tesco was weaker despite notching an eighth consecutive quarter of like-for-like growth and its first quarterly market share gain in five years. Over the 13 weeks ended 26 November that made up the third quarter, UK LFL sales rose 1.8% although slowed to 0.7% in the six Christmas weeks to 7 January.

Primark owner Associated British Foods was also in the red despite reporting that group revenue from continuing operations was 10% ahead of the same period last year at constant currency, with good growth delivered by all of its business arms.

As a result of the weakening of sterling in late summer last year, sales from continuing operations at actual exchange rates were strongly ahead with a 22% increase.

Online fashion retailer ASOS nudged a touch lower despite posting a 36% increase in total retail sales for the four months to the end of December.

Dunelm slipped as it reported a jump in total sales in the first half of the year but a drop in like-for-like sales.

Online electrical retailer AO World slumped after posting a 12.3% jump in third-quarter revenue and saying it is on track to meet guidance for the fiscal year.

Away from retailers, housebuilder Barratt Developments fell as it said pre-tax profit for the six months to the end of December is expected to be up 7% on the same period a year ago, with overall market conditions healthy amid strong demand for new homes.

Private healthcare provider Spire Healthcare tumbled after saying the group’s underlying performance for the year is expected to be towards the top end of the revenue and EBITDA guidance for 2016, but overall results were hit by the recent trading performance at St Anthony’s hospital.

Estate agent Savills racked up impressive gains as it said results for the year to the end of December are likely to be “meaningfully ahead” of its previous expectations following a strong finish to the year.

Recruiter Hays gained ground after posting a rise in second-quarter net fees.

There are no UK data releases of note due but in the US, initial jobless claims are at 1330 GMT.

Market Movers

FTSE 100 (UKX) 7,275.46 -0.21%
FTSE 250 (MCX) 18,342.98 -0.28%
techMARK (TASX) 3,398.34 -0.89%

FTSE 100 - Risers

Marks & Spencer Group (MKS) 357.70p 5.08%
Fresnillo (FRES) 1,421.00p 2.90%
Randgold Resources Ltd. (RRS) 6,715.00p 2.36%
Burberry Group (BRBY) 1,590.00p 1.86%
Rio Tinto (RIO) 3,386.00p 1.20%
Glencore (GLEN) 313.60p 1.16%
BHP Billiton (BLT) 1,435.50p 1.09%
Anglo American (AAL) 1,297.50p 0.97%
easyJet (EZJ) 1,065.00p 0.95%
Next (NXT) 4,176.00p 0.94%

FTSE 100 - Fallers

Hikma Pharmaceuticals (HIK) 1,845.00p -3.10%
Tesco (TSCO) 203.55p -2.51%
Shire Plc (SHP) 4,573.50p -2.31%
Direct Line Insurance Group (DLG) 345.60p -1.87%
Associated British Foods (ABF) 2,651.00p -1.74%
ITV (ITV) 204.00p -1.21%
BT Group (BT.A) 393.10p -0.94%
AstraZeneca (AZN) 4,534.00p -0.94%
WPP (WPP) 1,863.00p -0.85%
Barratt Developments (BDEV) 496.90p -0.82%

FTSE 250 - Risers

JD Sports Fashion (JD.) 352.00p 8.17%
Savills (SVS) 725.00p 5.00%
Debenhams (DEB) 56.80p 4.51%
Pagegroup (PAGE) 438.00p 3.87%
Hochschild Mining (HOC) 229.40p 3.01%
Hays (HAS) 163.00p 2.64%
Aveva Group (AVV) 1,986.00p 2.32%
Acacia Mining (ACA) 409.40p 2.15%
Supergroup (SGP) 1,753.00p 2.04%
Centamin (DI) (CEY) 148.30p 1.85%

FTSE 250 - Fallers

AO World (AO.) 173.70p -5.75%
Spire Healthcare Group (SPI) 326.40p -5.42%
Inmarsat (ISAT) 714.00p -4.74%
BTG (BTG) 585.00p -4.02%
SIG (SHI) 96.00p -3.57%
CLS Holdings (CLI) 1,530.00p -3.23%
Jupiter Fund Management (JUP) 431.30p -3.08%
Cobham (COB) 135.90p -3.00%
Dunelm Group (DNLM) 777.00p -2.51%
Halfords Group (HFD) 342.20p -2.42%