Marks & Spencer’s £1bn profits haul failed to inspire shares today after analysts began to factor in the likely impact of tougher trading conditions on this year’s performance.
The headline figure was marginally ahead of expectations, causing shares to rise on opening, but euphoria over the results was offset by cautious comments on the trading outlook from chief executive Sir Stuart Rose.
M&S shares tracked the wider London market lower, with the shares down by 5% or 21.5p at 395.5p by mid-morning. The FTSE 100 Index was off 76.4 points at 6300.1 as the top flight gave back gains seen yesterday.
The Footsie closed at its highest level in five months last night after benefiting from further gains for mining stocks. But the same stocks were top of the fallers board today, with BHP Billiton off 127p at 2069p and Antofagasta down 38.5p at 758.5p, a drop of 5%.
Elsewhere, Imperial Tobacco shares were on the back foot, down 72p to 2546p, after announcing plans for a £4.9bn rights issue in order to pay down debt on its acquisition of Altadis.
The rest of the retail sector mirrored the performance of M&S, with rival Next down 41p at 1243p and B&Q owner Kingfisher off 4.5p at 141.6p.
One of the bright spots in the FTSE 100 came from the banking sector after a gruelling few sessions for the industry. Alliance & Leicester recovered 10.75p to 441p, while Halifax Bank of Scotland added 8p to 470.5p.
Bradford & Bingley, which suffered in the wake of negative analyst comment yesterday, rose 2.25p to 114.25p.
Also in the FTSE 250 Index, directories firm Yell tumbled almost 22% after it slashed its dividend in order to maintain financial flexibility in uncertain economic times. Shares were off 45.5p at 163.5p.