The markets treated investors to another somnambulant start this morning, with a bone dry economic calendar already marking Wednesday out as one to forget.
After Tuesday’s retail and mining sector-led plunge the FTSE has settled at 7530, around 70 points off its all-time intraday peak. Things have only gotten worse for yesterday’s stragglers; G4S (CO:G4S) has slipped a further 1.2%, while Associated British Foods (LON:ABF) dropped another 2.9%, leaving the Primark-owner at a fresh 2 month low. However the UK index was aided by sterling’s latest losses, with the pound slumping 0.2% against the dollar and 0.4% against the euro, allowing the FTSE to rise 0.2%.
There was some good news – well, sort of – from the retail sector this Wednesday, with Marks & Spencer posting a far better than forecast set of half year results. While pre-tax profit (before adjusted items) fell 5% to £219.1 million, that was still higher than the £203 million estimated by analysts. In the much-watched clothing and home division – which is currently leaderless after the shock departure of Jo Jenkins back in October –like-for-like sales were down 0.1% in Q2 and 0.7% for the first half, a colossal improvement on the 5.9% plunge seen in last year’s financial fourth quarter.
Yet the food business continued to disappoint, trailing the like-for-like growth of its supermarket peers with a 0.1% drop in comparable sales. M&S also announced it would be ‘slowing’ the rollout of its Simply Food store opening plan, another blow to what is meant to be the company’s saving grace. That lacklustre food performance took the shine off the clothing recovery, with the stock’s early 1.5% rise quickly turning into a near 3% fall.
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