The FTSE struggled for momentum as weaker retailers and housebuilders weighed on performance. Tesco (TSCO) revealed like-for-like sales in the UK and Ireland over the 19 weeks to 6 January grew 2.3%, but this was 0.5% lower than anticipated. The sales miss was affected by a decline in tobacco sales and general merchandise. Shares in Tesco were marked 5% lower at 201.3p. Marks & Spencer (MKS) was also in the firing line following its third consecutive period of falling sales in clothing and homeware. Investors were concerned about a 0.4% decrease in food sales over the third quarter as the retailer usually performs well in this division. The stock declined 7% to 301.2p. Barratt Developments (BDEV) added to concerns over the housebuilding sector's outlook, flagging flat revenue in the second half of last year. The stock shed 2.7% to 617p. The housebuilder was followed lower by peers Berkeley (BKG) and Taylor Wimpey (TW.). The FTSE moved 14.4 points higher to 7,762. Brent crude oil gained 0.8% to $69.79 per barrel. OVERSEAS MARKETS According to reports, China dismissed rumours that it might halt purchases in US government debt, which relieved investors. The Dow Jones led the charge, trading 0.4% higher at 25,480 around 4:45pm UK time. MID AND LARGE CAP RISERS AND FALLERS Wholesaler Booker (BOK), which is expected to be taken over by Tesco, declined 3.9% to 223.8p. Total sales were up 3.4% in the 16 weeks to 29 December, but tobacco sales were down 2.6%. There was further bad news in the retail sector from greetings card firm Card Factory (CARD). The company reduced its earnings expectations from between £93m and £95m, down from £97.8m. Card Factory also warned of an extra £7m to £8m in costs, causing the shares to plummet 20% to 225.8p. Defence contractor Ultra Electronics (ULE) benefitted from an 21.6% relief rally to £15.15 as investors had feared another profit warning since the last one in November. The company reported expected revenues of 62% in 2017, up from 56%, and a strong order book. Weir (WEIR) retreated 1.9% to £22.12 as the market was expecting more benefits from US tax reform. The engineer said it expected a one-off non cash tax credit from the changes. Midcap recruiter Hays (HAS) gained 4.2% to 196.3p thanks to higher quarterly net fees and an encouraging performance internationally. Gambling business GVC (GVC) revealed 2017 core earnings are anticipated to hit the high end of its expectations as strong trading in the fourth quarter provided a boost. The shares were flat at 955p. A positive broker note from Barclays on online takeaway service Just Eat (JE.) spurred gains of 4.7% to 803.8p. SMALL CAP RISERS AND FALLERS Electrical retailer AO World (AO.) revealed that UK revenue increased 11.4% in the three months to 31 December, causing the shares to spark 2.9% to 134.8p. Online fashion retailer Boohoo.com (BOO) hiked its full year sales forecast after doubling revenue in the four months to 31 December. Despite the upbeat outlook, shares in the company were down 6.1% at 194.5p. Premier Oil (PMO) said it expects output to rise by over 10% in 2018 to up to 85,000 barrels of oil equivalent per day, prompting the shares to rise 1.7% to 100.2p. Lombard Risk Management (LRM) recommended a takeover from Dutch firm Vermeg at 13p per share, which valued the business at approximately £52m. The news excited investors as the shares soared 94.5% to 12.7p.
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