- Morrison, Tesco, Ted Baker fall after updates
- RSA review identifies 'inappropriate' behaviour by Irish execs
- BoE, ECB meetings and economic data in focus
techMARK 2,783.32 +0.06%
FTSE 100 6,709.13 -0.19%
FTSE 250 15,959.96 -0.26%
Heavy falls from supermarket stocks dragged UK markets lower on Thursday morning, as investors adopted a cautious approach ahead of central bank meetings and a raft of economic data.
Disappointing updates from Morrison and Tesco showed that the UK's Big Four grocers had a tough time over Christmas, with competition continuing to intensify from discount supermarkets such as Aldi and Lidl. Meanwhile, RSA Insurance fell after announcing the results of an external review into its Irish business.
The FTSE 100 was trading down 0.2% at 6,709 in early trading.
Policy meetings at the Bank of England and European Central Bank (ECB) will conclude today, with both central banks expected 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 is likely to be in focus today with trade figures from the UK due out this morning, along with consumer confidence numbers in the Eurozone and jobless claims in the US.
Overnight, data showed that Chinese consumer price inflation eased to 2.5% in December, down from 3% the month before and below the 2.7% consensus forecasts. The Chinese government's inflation target is 3.5%, so the figures may ease worries 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 policymakers viewed the effectiveness of its quantitative easing programme lessening over time as they voted nine-to-one to scale back stimulus.
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.
Meanwhile, rival Sainsbury's share price was extending losses this morning after it said yesterday that LFL sales were flat over the festive season.
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.
M&S pushed higher after a 1.8% rise in group sales over its third quarter, though LFL sales in the UK fell by 0.2% amid tough conditions for its clothing division.
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'.
FTSE 100 - Risers
Tullow Oil (TLW) 840.00p +2.44%
Melrose Industries (MRO) 303.30p +2.05%
CRH (CRH) 1,617.00p +1.89%
Marks & Spencer Group (MKS) 451.00p +1.37%
ITV (ITV) 199.10p +1.22%
GlaxoSmithKline (GSK) 1,617.00p +1.13%
Meggitt (MGGT) 533.00p +1.04%
AstraZeneca (AZN) 3,586.50p +1.04%
Hammerson (HMSO) 507.50p +0.99%
WPP (WPP) 1,356.00p +0.82%
FTSE 100 - Fallers
William Hill (WMH) 375.80p -6.00%
Morrison (Wm) Supermarkets (MRW) 240.00p -5.59%
ARM Holdings (ARM) 1,018.00p -4.59%
Tesco (TSCO) 318.00p -3.14%
Aberdeen Asset Management (ADN) 459.80p -2.85%
Standard Chartered (STAN) 1,280.00p -2.44%
RSA Insurance Group (RSA) 98.40p -2.28%
Sainsbury (J) (SBRY) 353.10p -1.92%
Tate & Lyle (TATE) 760.00p -1.68%
Fresnillo (FRES) 682.50p -1.37%
FTSE 250 - Risers
Laird (LRD) 293.10p +3.64%
Restaurant Group (RTN) 614.50p +3.28%
SIG (SHI) 213.50p +2.15%
Pace (PIC) 347.00p +1.55%
Workspace Group (WKP) 556.00p +1.46%
Ashmore Group (ASHM) 407.00p +1.34%
Law Debenture Corp. (LWDB) 536.00p +1.32%
Countrywide (CWD) 599.50p +1.27%
Savills (SVS) 667.00p +0.98%
Brown (N.) Group (BWNG) 535.00p +0.94%
FTSE 250 - Fallers
Spirent Communications (SPT) 87.00p -12.43%
Ladbrokes (LAD) 169.90p -5.45%
African Barrick Gold (ABG) 192.50p -2.92%
Hays (HAS) 128.80p -2.72%
Ocado Group (OCDO) 500.00p -2.63%
Lonmin (LMI) 294.30p -2.52%
Polymetal International (POLY) 558.00p -2.45%
Tullett Prebon (TLPR) 368.70p -2.07%
Pennon Group (PNN) 645.00p -2.05%
JD Sports Fashion (JD.) 1,564.00p -1.94%