Grocers, DIY and fashion

Thursday 14 January 2016 

The blue-chip index slumped in early trading as the global market correction continues on the back of free-falling commodity prices and a weakening Chinese yuan.

“Tesco has followed rivals Sainsbury’s (LSE:SBRY) and Morrisons (LSE:MRW) with strong Christmas sales and its shares topped the blue-chip board in early trading,” says AJ Bell Investment Director Russ Mould.

“The challenge now is to maintain this momentum as like-for-like sales in the 13 weeks to 28 November were less encouraging, down by 0.5%. Tesco (LSE:TSCO) is aiming to fight the discounters by focusing its efforts on ‘serving customers a little better every day’. Although it also conceded its Christmas performance was underpinned by ‘lower prices on an outstanding range of products’.

“Home Retail Group’s (LSE:HOME) warning that full year profits will be at the lower end of forecasts following disappointing sales at Argos might normally be expected to be accompanied by a fall in its share price. But any concerns were offset by the group confirming that it is in advanced talks over the sale of DIY arm Homebase to Wesfarmers for £340m. 

“Burberry (LSE:BRBY) was another strong blue-chip riser after better-than-expected figures. The iconic fashion brand’s third quarter sales were buoyed by growth in China although the outlook for the luxury sector remains uncertain.”

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