London open: RBS rises after shake-up, Tesco plummets

12th Jan 2012 08:28

A sharp fall for the retailers was met with a strong showing by the banks this morning, equating to a flat start for the FTSE 100. It has been reasonably busy on the corporate front, with several firms providing trading statements, but RBS and Tesco dominated the headlines early on.MARKETS CELEBRATE AS RBS CUTS JOBSAs expected, part-nationalised lender Royal Bank of Scotland (RBS) has revealed a massive shake-up to its investment banking and wholesale businesses, including a mass employment reduction of 3,500. The group's Chief Executive Stephen Hester said: "Our goal from these changes is to be more focussed for customers, more conservatively funded, more efficient and with better, more stable returns for shareholders overall.Shares rose over 3% in early trading, while sector peer Lloyds was also performing well.DISAPPOINTMENT FOR UK RETAILERSA big mover early on Tesco, with 'must do better' being the theme of its Christmas trading statement. Shares tumbled nearly 10% after the UK's leading supermarket chain saw sales performance in its home market fall below expectations, prompting the company to advise full-year trading profit growth will be around the low end of the range of analysts' expectations.Sector peers Sainsbury, Morrison and Marks & Spencer fell back in sympathy.Car and bike parts retailer Halfords has seen the fall in retail sales accelerate in the third quarter, which it blames on the mild weather. As such, the UK and Republic of Ireland gross margin is expected to fall by 130-150 basis points on a full-year basis.Home Retail Group has reported weak Christmas sales for Argos but says Homebase has been more resilient. The crucial like-for-like (LFL) sales figure for Argos was down a worrying 8.8% in the 18 weeks to the end of December. Over the last 44 weeks like-for-like sales have fallen 8.9%. Shares in chocolate retailer Thorntons soured after it reported a weaker than expected 0.6% rise in total sales over the important Christmas trading period.Bucking the trend was online grocer Ocado, which surged after enjoying a festive surge in sales. Gross sales in the seven trading days to Christmas rose 23.8% year-on-year. Cash and carry operator Booker was also firmer after like-for-like (LFL) sales increased by 6.7% in the 16 weeks to December 30th.RIO FINALLY TAKES CONTROLMiners edged higher with Vedanta Resources and Fresnillo among the better performers. Rio Tinto was in demand after finally buying up the remaining shares of Hathor to get 100% ownership. Emerging markets asset manager Ashmore rose after seeing assets under management (AUM) rise by 2.5% in the final quarter of 2011, driven by a mixture of net inflows and positive investment performance.Industrial services provider Cape nudged higher after giving a confident year-end trading update, saying that the strong revenue growth seen in the third quarter continued through to the end of the year, with higher levels of activity being seen across the majority of its geographies.FTSE 100 - RisersRoyal Bank of Scotland Group (RBS) 22.50p +3.26%Lloyds Banking Group (LLOY) 28.77p +2.15%Ashmore Group (ASHM) 331.60p +1.75%Petrofac Ltd. (PFC) 1,555.00p +1.50%Evraz (EVR) 402.30p +1.49%WPP (WPP) 727.00p +1.47%Admiral Group (ADM) 856.50p +1.42%Glencore International (GLEN) 402.25p +1.41%Vedanta Resources (VED) 1,030.00p +1.38%Fresnillo (FRES) 1,781.00p +1.37%FTSE 100 - FallersTesco (TSCO) 348.45p -9.49%Sainsbury (J) (SBRY) 288.40p -4.53%Morrison (Wm) Supermarkets (MRW) 291.00p -4.28%Polymetal International (POLY) 1,134.00p -1.73%Royal Dutch Shell 'B' (RDSB) 2,380.00p -1.39%Kingfisher (KGF) 252.00p -1.37%Marks & Spencer Group (MKS) 318.20p -1.21%Royal Dutch Shell 'A' (RDSA) 2,300.00p -1.18%Reckitt Benckiser Group (RB.) 3,347.00p -1.09%British Sky Broadcasting Group (BSY) 702.50p -0.78%FTSE 250 - RisersOcado Group (OCDO) 59.15p +6.67%Barratt Developments (BDEV) 102.80p +5.98%Supergroup (SGP) 565.00p +3.29%Computacenter (CCC) 350.00p +3.24%SIG (SHI) 94.00p +2.62%Berendsen (BRSN) 442.80p +2.36%Taylor Wimpey (TW.) 39.54p +2.04%Regus (RGU) 85.85p +1.96%Jardine Lloyd Thompson Group (JLT) 714.00p +1.93%Lonmin (LMI) 976.50p +1.88%FTSE 250 - FallersMicro Focus International (MCRO) 414.20p -4.20%Henderson Group (HGG) 100.00p -3.38%Bwin.party Digital Entertainment (BPTY) 155.10p -3.12%Imagination Technologies Group (IMG) 554.00p -2.89%Debenhams (DEB) 60.25p -2.67%Telecity Group (TCY) 631.00p -2.55%Home Retail Group (HOME) 85.35p -2.18%Rathbone Brothers (RAT) 1,077.00p -2.09%Phoenix Group Holdings (DI) (PHNX) 543.50p -2.07%Melrose (MRO) 347.00p -2.01%