News in the UK, affecting both the FTSE 100 and 250 today, was the revelation that Sainsbury’s made a bid approach for Home Retail Group (the owner of Argos and Homebase) in November, which was rejected. Sainsbury’s now look set to “considering its position” and now has until 2nd February to make a formal offer (under UK takeover rules), should they wish to proceed this way. Sainsbury’s share price fell on the back of this news, however Home Retail surged ahead, leading the FTSE 250 for the rest of trading, rising more than +40% during afternoon trading.
Next was the first of the high street retailers to announce a winter trading update following the Christmas season. As no surprise to us all, “unseasonably warm weather” has been one of the main reasons for a disappointing trading performance in the run up to Christmas, with sales at High Street shops falling 0.5% between 26 October and 24 December. Next has thus lowered full-year profit expectations, with the shares falling 5% during today’s trading session.
Natural Resource stocks in the UK rebounded following Monday’s heavy losses, with Glencore ending the day as the biggest gainer in the FTSE 100, closing trading +3.5%. At the close European indices were up with the FTSE 100 +0.7%, the CAC 40 +0.3%, and the DAX +0.3%.