UK Markets Decline But Key Retailers Rally

THURSDAY MARKET UPDATE: Shares in SuperGroup and Ocado rallied strongly, which helped to stem the tide of red on the FTSE 250

Alanna Petroff 7 February, 2013 | 6:12PM
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The FTSE 100 and FTSE 250 indices both headed south during afternoon trading, after a sharp market fall on Monday and two days of recovery on Tuesday and Wednesday. The markets are still trading near a 4 1/2 year high that was set last week.

The plunge into the red on Thursday came as the Bank of England held off on implementing any additional stimulus measures and the European Central Bank (ECB) left its benchmark interest rate unchanged.

The FTSE 100 index took a significant hit, falling by 67 points, or 1.1%, to close at 6,228. The FTSE 250 also fell, but was more resilient compared to its large-cap counterpart. Shares in two FTSE 250 retailers - SuperGroup (SGP) and Ocado Group (OCDO) - posted double-digit rallies, which supported the overall mid-cap index.

Burberry and Vodafone

Meanwhile, luxury fashion group Burberry (BRBY) was the main large-cap company dragging the FTSE 100 into the red. Share in Burberry plunged by 6.5% after the company announced a management shake-up, which will see its chief financial officer leave the iconic British fashion house in July.

Another large-cap company grabbing the headlines on Thursday was Vodafone (VOD). Shares edged up by nearly 1% after the telecom giant issued a relatively weak financial update.

"Investors will be glad to see that its update, filled with potential negatives, has not resulted in a move lower as it did when the company last briefed the market in November," said Will Hedden, a sales trader at IG.

Morningstar analyst Allan Nichols says the Vodafone results were slightly better than he had expected.

"The firm's reported revenue declined by 2% versus our full-year projection of a fall of 4.2%. However, this outperformance was mostly currency-related as the pound gave back some of its strength versus the euro. Operationally, European markets remain weak with service revenue down in Italy, Spain, the UK, the Netherlands, and even in Germany," he said.

To see the top winners and losers on the FTSE 100 each day, check out Morningstar's Heat Map.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Burberry Group PLC1,132.00 GBX0.89Rating
Ocado Group PLC347.20 GBX-0.80Rating
Superdry PLC9.06 GBX6.59
Vodafone Group PLC67.00 GBX0.93Rating

About Author

Alanna Petroff

Alanna Petroff  is a financial journalist with Morningstar UK.

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