UK shares make strong running in early trading on Thursday as a string of supermarket and other retail positives, financial issues and resources companies rally. The prices of WTI and Brent crude continues to straddle the $50 a barrel level and the market will be keeping a keen eye on the Bank of England's interest-rate call at midday.
Shortly after the opening for business the benchmark FTSE 100 index is roughly 72 points, or 1.1%, to 6491, while the midcap FTSE 250 is up 140 points, or 0.9%, to 15,992. WTI crude is a modest 0.37% higher at $48.83 a barrel, while Brent crude prices rise 0.2% to $51.27 a barrel. US markets closed solidly firmer over night as recent volatility in oil and currency markets calmed.
The big corporate story today is undoubtedly the significantly better-than-expected Christmas enjoyed by distressed grocery titan Tesco (TSCO), sparking a near 10% jump in the shares to 200p. Today's trading update contains several bold strategic developments too, with CEO Dave Lewis announcing a series of price cuts, turnaround initiatives and steps to strengthen the balance sheet. These include scrapping this year's final dividend, closing its Cheshunt headquarters and slashing capital expenditure.
Selling movie rental service Blinkbox and Tesco Broadband to TalkTalk (TALK), Tesco has also enticed respected Halfords (HFD) boss Matt Davies to run its core UK business, news that leaves the car parts-to-bicycles seller 6.3% lower at 433.5p.
Rival food retailer Marks & Spencer (MKS) cheapens 3.1% to 448.7p on a poor third quarter trading update. Blighted by delivery problems over the peak Christmas period, M&S flags a worse-than-expected like-for-like sales decline in General Merchandise, with clothing sales also crimped by warm autumn weather. Despite a good Christmas, growth in M&S' high-quality food business also falls short of consensus estimates.
Public transport ticket seller Trainline confirms plans to float on London’s Main Market. We’re not sure this is going to be a successful IPO as the brand’s popularity has arguably peaked and rail franchise owners generally sell tickets at a lower price direct to consumers online when you factor in booking fees.
Telco testing kit supplier Spirent (SPT) jumps nearly 12% to 88p as it unveils a surprise fourth quarter that beats expectations of both management and the City. 'Today’s news is even more pleasing given that we entered the fourth quarter with a poor book-to-bill on Networks & Apps, comments about trimming the cost base and a poor short term outlook,' points out Panmure Gordon.
Server replication technology specialist WANdisco (WAND:AIM) jumps 11% to 527.5p as energy supplier British Gas extends its big data deal with the company. The three-year agreement is worth £750,000 to WANdisco, its biggest big data deal to date.
Howden Joinery (HWDN) is among the main gainers on the FTSE All Share, up 6% at 415.8p, after the carpentry specialist's trading update points to forecast-beating 2014 pre-tax profit.
Homewares market leader Dunelm (DNLM) clips ahead 2.9% to 879.5p, as news of better-than-expected second quarter sales, up more than 4% like-for-like, prompts Cantor Fitzgerald to upgrade its full-year profit forecast.
British fashion brand Ted Baker (TED) ticks up 70p to £23.30 as it flags cracking Christmas trading. Over the 8 weeks to 3 January, retail sales surged 22.8% higher at the running Play of the Week, whose quirky differentiated designs means it is able to avoid margin-eroding discounts.
Rentokil Initial (RTO) adds three new pest control businesses to its global portfolio, part of a continuing roll-up strategy which has seen 30 acquisitions in the last 12 months. The news helps shares in the Camberley, Surrey-based business 2.3% higher at 120p.
Recruitment consultant Hays (HAS) rises 2.8% to 146p as net fee income, a proxy for revenue, rises 7% in total and 11% on a like-for-like basis. Key highlights were UK growth (13%), record performance in France (14%) and a turnaround in Australia and New Zealand (10%).
Fund manager Liontrust (LIO) puts on 3.7%, to 285p, as clients swelled its coffers with £424 million of new assets under management (AuM) in the last three months of the year.
More bad news for long-run broadcasting software flop Forbidden Technologies (FBT:AIM) as it throws in the towel in the US. A strategic rethink has the company saying it will focus on more promising markets, although sceptics will wonder where they are given the company's years of failure to deliver. The shares tank 11% to 10.5p, valuing the business that ran-up £0.8 million of losses on tiny £0.8 million of revenue last year at just £14 million.
Shares in small cap technology and engineering group Corac (CRA:AIM) rise 5.7% to 4.6p as it secures a £2.6 million order for two marine contracts.
Energy efficient boiler manufacturer Inspirit Energy (INSP:AIM) surges more than 26% to 1.1p, valuing the business at around £7.3 million. It announces the development and production of a new, smaller, two kilowatt boiler in a bid to expand its products' marketability to households.
Medicine re-developer Oxford Pharmascience (OXP:AIM) jumps 13.8% to 3.9p on promising results moving OXPzero Ibuprofen a step closer to proving proof-of-concept. Preliminary results are expected during the summer.
Drug developer Vectura (VEC) rises 3.6% to 149p on filing two treatments for lung condition COPD with US regulator, the FDA. If approved Vectura will, it is believed, receive a $35 million milestone payment. For more details see today’s edition of Shares.
Cancer diagnostic-maker kit Angle (AGL:AIM) gains 2.1% to 71.5p on potentially combining its Parsortix system with a similar cell analyser belonging to an-named pharmaceutical.
