FTSE 100 watch: Footsie subdued as Next shares plunge
The UK benchmark index has been little changed in today’s session, pulling away from the previous session’s record close, dragged down by a hefty drop in Next (LON:NXT) which today trimmed its earnings guidance. FTSE 100 housebuilders meanwhile have been in demand following an upbeat note on the sector at Deutsche Bank.
As of 14:18 GMT, the Footsie had shed 3.67 points to stand 0.05 percent lower at 7,174.22, having posted a record close in the previous session. Retailers are proving a drag on Britain’s blue-chip index in today’s session, after Next trimmed its 2016/2017 earnings guidance and warned on profits going forward.
“On top of that Next warned that it was ‘preparing the company for tougher times’ thanks to the impending sales-impact of rising inflation in 2017,” Connor Campbell at Spreadex commented in a morning note, adding that “understandably this news had wider ramifications for the retail sector as a whole”. Next’s shares are currently changing hands 11.61 percent in the red at 4,216.00p. FTSE 100 peer Marks & Spencer Group (LON:MKS) is 4.22 percent down at 329.95p, while shares in Primark owner Associated British Foods (LON:ABF) have lost 3.63 percent to 2,612.64p.
At the other end of the spectrum have been UK housebuilders whose shares have been propped up by an upbeat note on the sector at Deutsche Bank.
“After a tumultuous 2016, we see appealing value in the UK Housebuilder sector. While investor appetite for UK focussed stocks remains more moderated reflecting Brexit risk, we see dividend yield as difficult to ignore,” the bank said, as quoted by Reuters. Barratt Developments (LON:BDEV) is leading the sector higher, having added 2.65 percent to 477.30p.
**The FTSE 100 index was 0.04 percent down at 7,175.16 points as of 12:48 GMT on Wednesday, 04 January 2017.**
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