- Morrison, Tesco disappoint with Christmas updates
- M&S rallies after Investec comments despite Q3 miss
- BoE holds rates, ECB expected to do the same
techMARK 2,796.74 +0.54%
FTSE 100 6,738.35 +0.25%
FTSE 250 16,031.24 +0.18%
After a slow start, UK markets were registering small gains by Thursday lunchtime with a strong performance by Marks & Spencer and Hammerson offsetting disappointing updates by supermarket peers Morrison and Tesco.
Nevertheless, upside was limited in morning trade as investors adopted a cautious approach in the face of a barrage of economic data and a number of risk events, including policy meetings in the UK and Europe.
The FTSE 100 was trading 0.25% higher at around 6,740 by noon.
The Bank of England announced at midday that it had decided to leave the key Bank Rate at 0.5% and its asset purchase programme at £375bn, as expected.
The European Central Bank (ECB), which concludes its policy meeting this afternoon, is also predicted to keep interest rates where they are. The ECB, however, will be closely watched with analysts saying that the surprise dip in inflation in December ramps up the pressure on policymakers to easy policy further after the rate cut in November.
Economic data on tap
Economic data has been in focus this week and today is no exception: figures this morning showed that the UK deficit narrowed slightly in November and Eurozone economic confidence improved in December; US jobless claims out this afternoon are expected to show a slight fall on the previous week.
Overnight, data showed that Chinese consumer price inflation fell to 2.5% in December, down from 3% the month before and further below the government's target of 3.5%, easing concerns of the need to embark on a path of tightening monetary policy. However, producer prices in China fell 1.4% last month, declining for the 22nd consecutive month in a sign that manufacturers are still facing challenges.
Figures from ADP out yesterday showed that the American economy added significantly more jobs than expected in December, indicating upside risk to the official US employment report due out tomorrow.
Meanwhile, minutes from the Federal Reserve's latest meeting - released after the close last night - showed that US policymakers viewed the effectiveness of its quantitative easing programme as lessening over time.
Retailers in focus
Morrison was a heavy faller this morning after admitting that its sales performance over Christmas was "disappointing" as it warned investors that full-year profits would come likely come in at the bottom end of forecasts. Like-for-like (LFL) sales were down 5.6% over the six weeks to January 5th.
Supermarket peer Tesco also failed to impress with a worse-than-expected 2.4% slip in LFL sales over the festive period. Nevertheless, it did maintain its guidance for full-year profits. Rival Sainsbury, which said yesterday that LFL sales were flat over the festive season, was also lower.
Even fashion retailer Ted Baker edged lower despite reporting a 18.3% jump in sales over Christmas as it said it was on track to hit full-year targets.
Marks & Spencer's third-quarter sales broadly missed analysts' estimates today, but shares
managed to push higher, helped by comments from Investec. The broker reduced its forecasts for the retailer, but upgraded its rating from 'hold' to 'buy', saying that the business should now become cash generative with the current year being the last year of elevated capital expenditure. "We believe the changing business model is not reflected in current valuation," it said.
Property firm Hammerson was also registering gains after agreeing to buy a majority stake in Saint Sébastien shopping centre in Nancy, North East France, from AXA Real Estate for £109m.
RSA declined after saying that a review by PricewaterhouseCooper found that "inappropriate collaboration" among a number of senior executives in Ireland "undermined control effectiveness over claims". The company also said that it had suffered further weather losses over Christmas that will impact 2013 results.
High Street bookies William Hill and Ladbrokes were among the worst performers after Barclays Capital cut its ratings on the stocks to 'equal weight' and 'underweight', respectively. ARM Holdings was also hit by a downgrade by Deutsche Bank to 'hold'.
The share price of communications technology group Spirent Communications sank sharply after the company confirmed that 2013 revenues would be much lower than the previous year due to slower demand in the US.
FTSE 100 - Risers
CRH (CRH) 1,639.00p +3.28%
Tullow Oil (TLW) 846.50p +3.23%
Marks & Spencer Group (MKS) 457.60p +2.85%
ITV (ITV) 201.10p +2.24%
Melrose Industries (MRO) 303.10p +1.99%
Meggitt (MGGT) 537.50p +1.90%
Barclays (BARC) 289.05p +1.89%
Hammerson (HMSO) 510.50p +1.59%
Royal Bank of Scotland Group (RBS) 363.60p +1.59%
Shire Plc (SHP) 2,929.00p +1.56%
FTSE 100 - Fallers
William Hill (WMH) 368.00p -7.95%
Morrison (Wm) Supermarkets (MRW) 236.90p -6.81%
ARM Holdings (ARM) 1,022.00p -4.22%
Standard Chartered (STAN) 1,258.50p -4.08%
Aberdeen Asset Management (ADN) 455.60p -3.74%
RSA Insurance Group (RSA) 97.20p -3.48%
Sainsbury (J) (SBRY) 351.00p -2.50%
Randgold Resources Ltd. (RRS) 3,660.00p -2.06%
Diageo (DGE) 1,907.50p -1.60%
Unilever (ULVR) 2,377.00p -1.33%
FTSE 250 - Risers
Laird (LRD) 306.50p +8.38%
FirstGroup (FGP) 138.00p +5.75%
Restaurant Group (RTN) 618.50p +3.95%
Domino's Pizza Group (DOM) 541.00p +3.64%
Thomas Cook Group (TCG) 177.00p +3.09%
Pace (PIC) 351.90p +2.99%
IP Group (IPO) 174.40p +2.65%
Henderson Group (HGG) 235.40p +2.57%
Workspace Group (WKP) 561.50p +2.46%
Kenmare Resources (KMR) 19.25p +2.34%
FTSE 250 - Fallers
Spirent Communications (SPT) 85.80p -13.64%
Imagination Technologies Group (IMG) 161.60p -4.32%
Ladbrokes (LAD) 172.60p -3.95%
Centamin (DI) (CEY) 44.83p -3.57%
Polymetal International (POLY) 552.50p -3.41%
Tullett Prebon (TLPR) 367.30p -2.44%
De La Rue (DLAR) 836.00p -2.28%
African Barrick Gold (ABG) 193.80p -2.27%
Catlin Group Ltd. (CGL) 550.50p -1.70%
Evraz (EVR) 103.80p -1.70%