Retailers in the UK ran for cover today after a gloomy Christmas update from Waterstone’s owner HMV cast a shadow over a clutch of mid-cap firms.
Woolworths and WH Smith both lost ground after the HMV statement knocked confidence in the sector, while updates from the likes of H Samuel firm Signet added to the downbeat mood.
This was mirrored in the top flight by supermarket giant Sainsbury’s, although the FTSE 100 Index still managed to rise 3.6 points to end the session at a four-and-a-half year high of 5735.1.
Sainsbury’s produced one of the strongest trading statements, with sales up more than 5% and little sign its recovery was running out of steam.
But shares retreated 3% or 10.5p to 313.75p as investors took heed of a warning from chief executive Justin King that costs had been higher than expected.
In contrast, Boots was among those that kept the top flight in positive territory after it beat expectations with a 0.3% rise in underlying sales for the final three months of the year. Shares added 14.5p to 651.5p.
Commodity-based stocks played a key role in the resilience of the market, with Kazakhmys up 21.5p at 791.5p and Rio Tinto ahead 61p at 2780p.
There was also a gain of 3% for Scottish Power after it surprised the market by bringing in former Allied Domecq boss Philip Bowman to replace chief executive Ian Russell.
Scottish Power said it was business-as-usual, but analysts said the move raised hopes of a takeover of the group, lifting shares 16p to 559p.
But the day’s top performer was Shire Pharmaceuticals, which surged 7% or 55.5p to 850.5p after Deutsche Bank raised its target price on the stock.
GUS was in positive territory for much of the session following its comments that Argos and Homebase had outperformed their respective markets, despite failing to grow sales during the festive period. Shares rose by as much as 2% but later retreated to stand 11.5p lower at 993p.
House of Fraser enjoyed a strong festive performance, with shares lifting 1.25p to 111.5p on the back of better-than-expected figures.
HMV shares fell 18.5p to 178.5p after its chief executive announced his decision to retire amid falling sales.
HMV bid target Ottakar’s was also off 10.5p to 330.5p as it struggled to compete with major discounting at rivals such as Amazon.com and Waterstone’s, which is owned by HMV.
The disappointment from HMV affected shares of rival companies still to report festive figures. They included WH Smith, which dipped 12p to 395.25p, and Woolworths off 1.25p to 37.75p.
It was also a far from merry Christmas for Clinton Cards as a profits warning sent shares in the struggling firm down 14% or 10.5p to 64.5p. The same reason led photo-booth specialist Photo-Me International down 29% or 34.75p to 83.5p.
The highest Footsie risers were Shire Pharmaceuticals up 55.5p to 850.5p, Scottish Power rising 16p to 559p, Cairn Energy up 54p to 1982p and Kazakhmys rising 21.5p to 791.5p.
The heaviest fallers were Royal & Sun Alliance off 4.25p to 120.25p, Sainsbury down 10.5p to 313.75p, Tate & Lyle off 16.5p to 572p and Cable & Wireless down 3.5p to 123.75p.