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UK shares edge up with focus on mixed retailers
January 10, 2013 / 9:26 AM / 5 years ago

UK shares edge up with focus on mixed retailers

* FTSE 100 index up 0.1 percent
    * Tesco among top gainers after good sales growth
    * M&S, Sainsbury fall after tough Christmas
    * Gains on China data capped by resistance

    By Alistair Smout
    LONDON, Jan 10 (Reuters) - UK shares edged up on Thursday as
strength in Tesco, which beat sales expectations over the
Christmas period, outweighed weakness in its competitors.
    At 0807 GMT, the FTSE 100 was up 6.79 points, or 0.1
percent, at 6,105.44, struggling to sustain a break through
strong resistance a day after hitting its highest level since
May 2008.
    Miners pared back early gains, edging up a mere
0.1 percent despite data showing iron ore imports in China, the
world's top metals consumer, hit a record high in December.
    Tesco rose 2.4 percent after it posted its highest
sales growth in three years, offering signs that a turnaround
strategy is beginning to show results. 
    Its performance over Christmas 2011 prompted the firm's
first profit warning in 20 years and a strategic re-think. But
this time around Tesco seems to have regained its edge during
the highly competitive festive season.
    Marks & Spencer, meanwhile, fell 4.1 percent after reporting
a steep drop in non-food sales in the Christmas quarter.
    "People are going out of Marks and into Tesco," Basil
Petrides, trader at Hartmann Capital, said.
    "If you look at them historically, they've had 20 years of
sustainable growth. Tesco has the best management of all the
supermarket retailers in the UK," he said, adding that Tesco
shares could rise back to the 400 pence level. 
    Tesco added 3.2 points to the index, outweighing falls in
other retailers to bring the consumer staples into positive
    J Sainsbury fell 1.2 percent, taking total falls
since it reported that sales growth had fallen yesterday to 4.5
    Tesco was only surpassed on the gainers board by Bunzl
, upgraded by Numis after making its fifth acquisition
in Brazil.
    "We believe the acquisitions today will focus investor
attention on the opportunities for acquired growth and we see
the shares moving higher," said Numis analysts in a note. Bunzl
gained 3.8 percent. 
    Mike van Dulken, head of research at Accendo Markets, said
the broader UK market might struggle to post further gains until
the earnings season was further under way.
    "Normally, Chinese data like we've seen overnight would be a
real shot in the arm, especially for the miners," he said. 
    "Up near resistance around the 6,100 level, (the data)
maintained the sentiment from yesterday, but we haven't been
able to push on."    

 (Additional reporting by Sudip Kar-Gupta and Jon Hopkins;
Editing by John Stonestreet)

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