A strong trading update by grocer Sainsbury's (SBRY) is not enough to spur the FTSE 100 to gains in early trading as the blue chip benchmark slips a quarter of a per cent to 7,257.

Travel stock TUI (TUI), which operates the TUI Travel and Thomson brands, is the large cap index's biggest faller, down 4.8% at £11.34.

Other under pressure stocks include outsourcers Capita (CPI) and Babcock International (BAB) as well as packaging outfit Smurfitt Kappa (SKG).

The FTSE 100's biggest gainer is Sainsbury's after strong sales growth in Argos, which it acquired in 2016 for £1.3bn, helped like-for-like group sales gain 1% over the 15 weeks to 7 January.

There's no guidance on profit in the pre-close trading update though chief executive Mike Coupe says the supermarket cut prices aggressively over the holiday period and that the market remains competitive. Sainsbury's trades 6.7% higher at 276p.

PROFIT UPGRADE

Taylor Wimpey (TW.) dips 0.9% to 173p following a trading statement which says full-year results are expected to be at the upper end of market forecasts. Shares in the housebuilder rallied strongly in the week ahead of today's update and investors look to be taking profit on the back of an impressive update. Chief executive Pete Redfern says earnings before interest, tax and amortisation is likely to be at the top end of a range between £706m and £755m.

Aerospace and defence outfit Cobham (COB) says it won't propose a final dividend for the year to 31 December because of rising net debt and lower-than-expected trading profit. Shares tumble 20% to 132p.

CONSUMER STOCKS

Among consumer stocks, Ted Baker (TED) gains 4.4% to £27.65 as sales gained 10.6% at constant currencies and margins held firm in the 8 weeks to 7 January. Chief executive Ray Kelvin says the high street retailer should deliver full-year results in line with market expectations.

Cineworld (CINE) trades flat at 603p after its reported box office takings increased 7.0% at constant currencies in the year to 31 December. Growth in Cineworld's smaller retail, advertising and distribution revenue streams was a little higher helping overall revenue gain 8.3%.

INTERSERVE GAINS

After a string of profit warnings, outsourcer Interserve (IRV) enjoys a bounce as it flags solid trading and lower-than-expected net debt at the end of its 2016 financial year. Shares gain 7.9% to 343p.

Small cap Amur Minerals (AMUR:AIM) gains 5.4% to 12.37p after tests revealed higher potential recovery rates on key metals found in deposits at its Maly Kurumkon/Flangovy site in Russia.


Issue Date: 11 Jan 2017