- Updates from Sainsbury, Mothercare, Majestic fail to impress
- Eurozone retail sales, German factory orders beat forecasts
- US data, central banks in focus over coming days
techMARK 2,783.91 -0.20%
FTSE 100 6,725.52 -0.44%
FTSE 250 16,043.77 -0.16%
The FTSE 100 pulled back from a two-month high on Wednesday after a host of updates from UK retailers disappointed investors.
Meanwhile, traders were showing caution ahead of a number of 'risk events' over the coming days that have the potential to spark major market volatility.
The FTSE 100 was trading 0.4% lower at around 6,726 by midday after having finished at its highest level since November 4th on Tuesday.
Markets across Europe were trading in the red today despite data from the region coming in better than expected: Eurozone retail sales increased at an annual rate of 1.6% in November, recovering after the previous month's revised 0.3% decline; German factory orders rose by by 2.1% month-on-month in November, rebounding strongly after a 2.1% fall previously.
Investors cautious ahead of risk events
With Eurozone data now out of the way, the focus will turn to the ADP employment report in the States this afternoon, which is often seen as a rough indicator of the official non-farm payroll figures due to be released on Friday.
Meanwhile, the minutes of December's Federal Reserve policy meeting will also be released after the close, which will shed more light on the central bank's decision to begin scaling back stimulus last month.
"The Fed may have finally announced its first taper in December, but we're still seeing $75bn of asset purchases every month, making the jobs report, and therefore the ADP figure, extremely important. The markets may not have reacted to the first taper because it was relatively small but that doesn't mean we won't see a bigger reaction if the data supports a larger taper, say $20bn," said Market Analyst Craig Erlam from Alpari.
Looking ahead to tomorrow, policy meetings at the Bank of England and European Central Bank will take place, with the latter likely to be closely watched after the surprise dip in Eurozone inflation revealed yesterday.
Retailers in focus: Sainsbury, Mothercare, Majestic
After an initial rise, Sainsbury sank as it reported flat like-for-like (LFL) sales in the third quarter as customers held back on spending ahead of the Christmas period. While sales still managed to beat consensus forecasts, S&P Capital IQ maintained its 'sell' rating for the stock and cut its target price, saying: "We are increasingly concerned about Sainsbury's weakening balance sheet and do not see any dividend increase in fiscal year 2015."
Rival supermarket Tesco, which is due to update the market tomorrow on its performance over the festive season, was also trading in the red this morning along with Morrison.
The share price of Mothercare plummeted by as much as a third this morning after the baby products retailer said that full-year profit would come in below market forecasts as it battled against Christmas price discounting and weak trading conditions.
Wine retailer Majestic was also lower despite saying that UK store sales for the 10 weeks to January 6th were up 5.9% year-on-year as it opened its 200th store during the period.
Banking stocks were performing well this morning, extending gains made yesterday when data showed that funding conditions had improved in the fourth quarter of 2013. Barclays, Lloyds and RBS were making gains.
Insurance firm RSA was also higher after reiterating its confidence that its recent financial irregularities are isolated to its Irish business. The group attempted to reassure investors ahead of the results of an independent investigation tomorrow.
British Land was lower today after going ex-dividend, along with Dairy Crest and WH Smith.
Utility companies Severn Trent, SSE, Centrica and National Grid were unwanted.
FTSE 100 - Risers
RSA Insurance Group (RSA) 101.90p +4.25%
Glencore Xstrata (GLEN) 314.95p +1.98%
easyJet (EZJ) 1,629.00p +1.50%
International Consolidated Airlines Group SA (CDI) (IAG) 434.40p +1.45%
Lloyds Banking Group (LLOY) 83.64p +1.37%
Royal Bank of Scotland Group (RBS) 355.20p +1.37%
ARM Holdings (ARM) 1,067.00p +1.14%
Standard Life (SL.) 369.80p +1.09%
Rexam (REX) 510.50p +0.99%
Prudential (PRU) 1,358.00p +0.67%
FTSE 100 - Fallers
Tate & Lyle (TATE) 775.00p -3.19%
Sainsbury (J) (SBRY) 360.00p -2.41%
Imperial Tobacco Group (IMT) 2,259.00p -2.38%
Tesco (TSCO) 324.95p -2.05%
Standard Chartered (STAN) 1,306.50p -2.02%
Centrica (CNA) 330.80p -1.96%
Severn Trent (SVT) 1,635.00p -1.92%
Morrison (Wm) Supermarkets (MRW) 248.80p -1.89%
Fresnillo (FRES) 694.00p -1.63%
SSE (SSE) 1,338.00p -1.47%
FTSE 250 - Risers
Aveva Group (AVV) 2,338.00p +10.08%
Interserve (IRV) 667.50p +3.01%
Marston's (MARS) 149.00p +2.62%
Ocado Group (OCDO) 471.40p +2.57%
Pace (PIC) 340.90p +2.46%
Entertainment One Limited (ETO) 279.10p +1.97%
Moneysupermarket.com Group (MONY) 192.10p +1.96%
African Barrick Gold (ABG) 201.90p +1.87%
Workspace Group (WKP) 551.50p +1.75%
Vedanta Resources (VED) 890.00p +1.54%
FTSE 250 - Fallers
International Personal Finance (IPF) 484.80p -4.94%
Imagination Technologies Group (IMG) 169.20p -3.31%
Premier Oil (PMO) 302.80p -2.98%
Rightmove (RMV) 2,728.00p -2.64%
Dairy Crest Group (DCG) 547.50p -2.32%
esure Group (ESUR) 253.40p -2.31%
Cairn Energy (CNE) 267.70p -2.30%
De La Rue (DLAR) 862.50p -2.27%
Hunting (HTG) 744.50p -1.98%
Evraz (EVR) 106.50p -1.84%