The major drag on the UK index this Wednesday was Next, which plunged more than 10% after revealing a rather troublesome post-Christmas trading statement. With full price sales dipping 0.4% across the holiday period the retailer was forced to lower its annual pre-tax profit guidance to £792 million from the previously stated £785 million to £825 million. 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. Understandably this news had wider ramifications for the retail sector as a whole, with Debenhams, Primark-owner Associated British Foods and Marks & Spencer all slipping between 4% and 5%.
This retail revolt left the FTSE flat at 7175, with solid gains in the commodity and banking sectors helping to prevent the index from dipping into red-territory. A flash of green for the pound also hampered the FTSE this Wednesday, with sterling taking 0.3% off the dollar and 0.1% off the euro. Still to come this morning is December’s construction PMI, with analysts expecting a slight decrease from 52.8 to 52.6 month-on-month.
The Eurozone was hardly much more interesting this Wednesday; the DAX and CAC both rose a meagre 0.1% as they await the region’s services PMIs. The Eurozone-wide figure is set to be confirmed at 53.1, a decline from November’s 53.8.
