High street fashion chain Next (NXT) gets the eagerly awaited Christmas reporting season underway as it reports festive sales as expected but still lowers full year guidance.

The UK retail sector has been under a cloud for weeks with investors anticipating a gloomy run-in to Christmas as consumers flex their muscles over discounts and on line bargains. Yet Next has survived the worst of the threats as its own internet sales (up 14.9%) prop-up a 7% decline in high street store sales.

This news comes as a huge relief to investors who had expected worse, sending shares in the retail chain soaring more than 5% in early trade on Thursday to £43.94, making Next the second best performing share on the UK main market. The stock had traded at close on £62 as recently as July.

Next has still lowered its main full year profits guidance by £4m to £723m, largely due to the seasonal sales mix and because of hefty discounting that cut into profit margins.

The Next news gives much of the UK retail sector a lift with major names also on the up, with Marks & Spencer (MKS) nearly 3% ahead, Superdry (SDRY) more than 4% up and Primark-owner Associated British Foods (ABF) around 2.5% higher.

CHINA SLUMP SPARKS APPLE ALERT

The Next news comes after a shock sales guidance cut overnight from technology giant Apple, its first warning in years. That comes after a much steeper slowdown in China for its iPhones, one of Apple’s biggest and most important markets.

Apple's share price sank more than 7% in after-hours trade, extending its more than 28% slide since November.

But Apple failed to dampen the mood in the US, which saw all three of its key markets – the Dow Jones, S&P 500 and Nasdaq post gains overnight.

The same cannot, so far, be said of UK markets which continue their spiral lower in early Thursday trade. The FTSE 100 and FTSE All-Share are both modestly lower at 9am, the FTSE 100 at 6,727.95.

NORWEGIANS GIVE FAROE MORE TIME

The deal to takeover north sea oil and gas explorer Faroe Petroleum (FPM:AIM) has been extended by an extra 14 days. The Norwegian company DNO that is trying to take control of Faroe wants to give shareholders in the Aberdeen-based business more time to mull its 152p per share offer.

DNO now owns 30% of Faroe's shares, sparking a mandatory offer under takeover rules, wants full control. It has so far received the support of just 13% of investors and it will need roughly double that if the deal is to get forced through.

Faroe shares remain largely flat at 146.8p.

Elsewhere, bumper orders give construction group Costain (COST) a lift, its share price up more than 5% at 341.5p after reporting a record order book worth £4.2bn. That’s up from £3.9bn a year ago thanks to big workloads with the likes of Network Rail and Highways England.

The company also reports a ‘strong net cash position’ of £110m.

Eastern Europe-based low cost airline Wizz Air (WIZZ) reported a 18.3% year-on-year rise in December passenger numbers to 2.66m as capacity rose 16.5% to 2.99m seats.

Wizz shares nudge almost 2% higher to £27.99.

A positive progress report from health treatments delivery designer Vectura (VEC) sees its share price storm to the top of the FTSE All-Share leader board on Thursday.

Shares in the company, which is developing an asthma delivery system alongside partners, rally more than 10% to 78.05p, valuing the business at roughly £520m.

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Issue Date: 03 Jan 2019