London midday: FTSE dips as M&S, Tesco updates fail to dazzle

London stocks were still just in the red by midday on Thursday as investors waded through a deluge of corporate news, with updates from Marks & Spencer and Tesco failing to impress.

The FTSE 100 was down 0.1% at 7,545.58.

Russ Mould, investment director at AJ Bell, said: "The FTSE 100 started Thursday a touch lower as investors turned their nose up at some mildly positive updates from the likes of Tesco, Marks & Spencer and Persimmon.

"The markets had a reminder of inflationary pressures yesterday afternoon as US inflation figures hit a 40-year high.

"This is clouding the outlook for many businesses. For Marks & Spencer it looks like it has been better to travel than arrive, with a really strong run for the shares brought to an end despite strong festive trading.

"The retail sector, so far at least, seems to have done well despite Omicron, although the likes of Marks & Spencer and the supermarkets are potential beneficiaries of the fact that, with Christmas parties cancelled, more of us were entertaining at home and treating ourselves to extras like sparkling wine and posh snacks.

"Despite Marks’ soggy share price, it’s still significant that its clothing and home business, long the ugly duckling of the group, is continuing to spread its wings having delivered growth for the second successive quarter.

"Perhaps there is some disappointment that the company hasn’t served up another big upgrade today - though in fairness full-year guidance had been hiked twice already."

In equity markets, M&S fell even as the UK food and clothing retailer said it now expects annual profits of at least £500m after strong Christmas sales driven by outperformance in its food range. Fellow retailer Next also lost ground.

Supermarket chain Tesco was down despite lifting annual profits guidance after better-than-expected third-quarter and Christmas sales.

Countryside Properties tanked as it announced the departure of its chief executive and said first-quarter trading had been below the board’s expectations.

Housebuilder Persimmon lost ground despite posting a jump in revenues, with peers Barratt, Taylor Wimpey and Berkeley also lower.

On the upside, Wood Group surged as the consulting and engineering company said it was selling its built environment division after a review and reported a fall in core profit.

Hays rallied after the recruiter said full-year operating profit was set to come in ahead of markets expectations following a record second-quarter quarter.

Shares of pub group Mitchells & Butlers fizzed higher after a well-received trading update.

Market Movers

FTSE 100 (UKX) 7,545.58 -0.08%
FTSE 250 (MCX) 23,008.72 -0.17%
techMARK (TASX) 4,472.05 -0.43%

FTSE 100 - Risers

Prudential (PRU) 1,324.50p 1.96%
Pershing Square Holdings Ltd NPV (PSH) 2,945.00p 1.90%
Smith (DS) (SMDS) 399.80p 1.45%
Imperial Brands (IMB) 1,685.00p 1.44%
BT Group (BT.A) 177.15p 1.43%
Royal Mail (RMG) 523.20p 1.28%
Informa (INF) 563.20p 1.19%
Mondi (MNDI) 1,913.50p 1.14%
HSBC Holdings (HSBA) 506.30p 1.02%
Admiral Group (ADM) 3,131.00p 0.97%

FTSE 100 - Fallers

Next (NXT) 7,712.00p -3.62%
Sage Group (SGE) 798.00p -2.66%
Aveva Group (AVV) 3,050.00p -2.56%
JD Sports Fashion (JD.) 207.50p -1.89%
Croda International (CRDA) 8,674.00p -1.83%
3i Group (III) 1,409.00p -1.78%
Persimmon (PSN) 2,575.00p -1.76%
Berkeley Group Holdings (The) (BKG) 4,484.00p -1.71%
Spirax-Sarco Engineering (SPX) 14,270.00p -1.55%
Tesco (TSCO) 287.80p -1.52%

FTSE 250 - Risers

Wood Group (John) (WG.) 244.60p 22.79%
IP Group (IPO) 115.00p 4.74%
Provident Financial (PFG) 361.80p 3.02%
Direct Line Insurance Group (DLG) 303.80p 2.98%
Darktrace (DARK) 455.80p 2.80%
Ninety One (N91) 268.00p 2.68%
BlackRock World Mining Trust (BRWM) 636.00p 2.58%
Wetherspoon (J.D.) (JDW) 937.00p 2.13%
Weir Group (WEIR) 1,863.00p 2.03%
Beazley (BEZ) 482.10p 2.01%

FTSE 250 - Fallers

Countryside Properties (CSP) 299.00p -27.39%
Marks & Spencer Group (MKS) 239.20p -5.45%
Micro Focus International (MCRO) 440.20p -2.80%
Trustpilot Group (TRST) 265.40p -2.78%
Baillie Gifford Shin Nippon (BGS) 194.60p -2.70%
Cineworld Group (CINE) 37.98p -2.64%
JPMorgan Japanese Inv Trust (JFJ) 604.00p -2.27%
Games Workshop Group (GAW) 9,090.00p -2.10%
Pagegroup (PAGE) 617.00p -2.06%
Kainos Group (KNOS) 1,627.00p -2.05%