UK stocks lost ground on Thursday after heavy falls overnight in the US following the release of minutes from the latest Federal Reserve meeting.

The Fed, as it is known, signaled it could move earlier than expected to raise rates and tame inflation as well as reducing its balance sheet, effectively stopping the market purchases of Treasury bonds which have helped support risk assets.

Treasury yields spiked, sending stocks – in particular those in the technology sector – sharply lower. Losses were carried over into the Asian session with a fall of nearly 3% for Japan’s Nikkei index.

At midday the FTSE 100 was down 34 points or 0.5% to 7,483 points with software and industrial stocks leading the decline while banks eked out gains on the prospect of higher rates.

COMPANY NEWS

Variety goods value retailer B&M European Value (BME) reversed its early gains to trade down 1.3% at 626p despite having raised its full year profit guidance following a strong third quarter to December 25 which saw it increase sales by 14% on a two-year like-for-like basis.

Online women's fashion brand Sosandar (SOS) posted a strong trading update for the first quarter to December with sales up 122% on the same period last year, although the shares gave up their early rally to trade sideways at 31.5p.

The firm cited record trading with third parties M&S (MKS), Next  (NXT) and John Lewis, following significant investment in stock depth and breadth, for the jump in revenues.

Shares in Next itself, the UK’s largest clothing retailer, followed the same trend, dropping 2% to £78.70 despite the firm raising its full year earnings guidance for the fifth time in 10 months.

The firm, which trades from 500 physical stores as well as online, said full-price sales in the eight weeks to Christmas day were 20% higher than last year. That compared with forecasts of a 10% rise.

Shares in sausage roll purveyor Greggs (GRG) were also lower, easing 2.8% to £32.77, even though the firm posted higher like for like revenues on a two-year basis to the end of December.

Shares in media agency M&C Saatchi (SAA) jumped 9% to 230p, building on their 12% rally yesterday, after the board confirmed it had received an approach from a firm connected to Vin Murria, one of its directors.

The firm said no proposal had been received yet but the board had been told by AdvancedAdvT, a special purpose acquisition vehicle chaired by Murria, ‘to expect one in the near term’.

Shares in fashion brand Dr Martens (DOCS) fell 8.5% to 385p after private equity firm Permira sold 65 million shares at 395p raising £257 million in proceeds.

The sale leaves Permira with roughly 364 million shares or 36.4% of the issued share capital.

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Issue Date: 06 Jan 2022