London open: Stocks flat as Tesco, M&S updates disappoint

London stocks were little changed in early trade on Thursday, with mixed Christmas trading updates from the likes of Tesco and Marks & Spencer disappointing analysts and investors.

At 0850 GMT, the FTSE 100 was flat at 7,751.09, with the pound down 0.1% versus the euro at 1.1294 and 0.2% lower against the greenback at 1.3480.

As further updates flowed in on the festive period, Thursday was a veritable retail bonanza.

Tesco fell after its sales for the Christmas period missed City forecasts. For the 13 weeks to 25 November, Britain's largest grocery group increased like-for-like sales 2.3% in the UK and Ireland, and then for the six-week festive trading period to 6 January, saw LFL growth of 2.0%. This was a fairly strong performance, but expectations were for 2.4% growth in the third quarter and 2.8% for Christmas.

Marks & Spencer numbers were much worse, with UK like-for-like sales down 1.4%. Over the 13 weeks to 30 December, M&S food LFL sales fell 0.4% in what the group blamed on "ongoing trading pressures continued in the lead up to Christmas as consumer spending and choices reflected tighter budgets", though other supermarket groups seemed to do a lot better.

FTSE 250 wholesaler Booker was in the red despite saying third-quarter sales rose 3.4%, with like-for-likes up 3.8%.

Card Factory fared the worst among its peers, however, with its shares down a whopping 20% despite what it called a “solid” Christmas trading period. It said any earnings growth for this year will be limited due to the impact of foreign exchange and wage inflation.

It wasn’t all bad news though, with online electrical retailer AO World edging up after posting an 11% jump in revenue in the final three months of last year.

Outside the FTSE 350, shares in fast fashion brand Boohoo failed to make any headway due to very high expectations, slipping into the red despite upgrading its full-year forecasts after posting a doubling of its revenues for the four months to the end of December.

Away from the retail sector, housebuilder Barratt Developments was lower after saying it was well positioned for the second half of the financial year and reporting first half forward plot sales up 3.8% at 10,921 plots at a value of £2.38bn.

Ultra Electronics surged after saying it sees “significant exposure to the strengthening US defence budget”, while outsourcer Bunzl rose after saying it expects US tax changes to have a positive impact from this year and announcing acquisitions in the UK and the US.

FTSE 250 recruiter Hays was in the black as it posted a 13% jump in second-quarter net fees thanks to a solid performance form its international businesses as the UK segment was broadly flat, while builders merchant Grafton was higher as it said it now expects 2017 earnings before interest, tax and amortisation to be slightly ahead of consensus estimates.

Jupiter Fund Management was weaker as it said total assets were up 3.7% in the fourth quarter.

In broker note action, Just Eat was boosted by an upgrade at Barclays, while Anglo American was up after an upgrade by Morgan Stanley. Greene King and Metro Bank were hit by downgrades from Numis and Investec, respectively.

Market Movers

FTSE 100 (UKX) 7,751.09 0.03%
FTSE 250 (MCX) 20,712.54 -0.23%
techMARK (TASX) 3,519.23 0.28%

FTSE 100 - Risers

Just Eat (JE.) 808.80p 5.37%
Anglo American (AAL) 1,728.40p 1.65%
British American Tobacco (BATS) 5,042.00p 1.55%
Antofagasta (ANTO) 1,028.58p 1.39%
BHP Billiton (BLT) 1,619.80p 1.28%
SSE (SSE) 1,319.00p 1.07%
Centrica (CNA) 142.00p 1.07%
Bunzl (BNZL) 2,025.00p 1.00%
Rio Tinto (RIO) 4,129.00p 0.98%
Ashtead Group (AHT) 2,071.00p 0.88%

FTSE 100 - Fallers

Marks & Spencer Group (MKS) 311.10p -3.98%
Tesco (TSCO) 205.55p -3.00%
Barratt Developments (BDEV) 621.50p -2.00%
Next (NXT) 4,964.00p -1.51%
Taylor Wimpey (TW.) 197.60p -1.30%
Paddy Power Betfair (PPB) 8,370.00p -1.24%
Berkeley Group Holdings (The) (BKG) 4,165.00p -1.19%
London Stock Exchange Group (LSE) 3,658.00p -1.14%
Whitbread (WTB) 3,856.00p -1.13%
Persimmon (PSN) 2,643.00p -1.12%

FTSE 250 - Risers

Ultra Electronics Holdings (ULE) 1,452.00p 16.53%
Grafton Group Units (GFTU) 796.00p 4.74%
TI Fluid Systems (TIFS) 245.40p 4.07%
William Hill (WMH) 343.00p 3.25%
Superdry (SDRY) 1,905.00p 2.97%
Hays (HAS) 193.80p 2.92%
Pagegroup (PAGE) 526.50p 2.03%
Ferrexpo (FXPO) 305.90p 2.00%
Softcat (SCT) 529.00p 1.73%
GVC Holdings (GVC) 975.00p 1.72%

FTSE 250 - Fallers

Card Factory (CARD) 222.80p -21.10%
Greene King (GNK) 532.03p -4.96%
Ted Baker (TED) 3,004.00p -3.66%
Metro Bank (MTRO) 3,594.00p -2.86%
Brewin Dolphin Holdings (BRW) 377.80p -2.83%
WH Smith (SMWH) 2,166.00p -2.78%
Booker Group (BOK) 226.70p -2.66%
RPC Group (RPC) 813.80p -2.52%
Mitchells & Butlers (MAB) 263.60p -2.23%
Workspace Group (WKP) 980.00p -2.20%