London open: Sainsbury warns celebrations will not carry into 2013

9th Jan 2013 08:10

The UK's main equity benchmark, the FTSE 100, has started the Wednesday session slightly higher, up by 18 points to 6,071, to just below technical resistance at the 6,100 point mark, despite the release of mixed results overnight from US aluminium giant Alcoa and what appears to be a rather mixed news-flow here in the UK. That as investors ponder whether to push equities higher before debt negotiations in the United States are successfully completed and while the Eurozone crisis continues to simmer, although for now periphery debt continues to come slowly off the boil. Time will tell if quickly enough.Not to be missed either, some investors may also prefer to wait and see what the European Central Bank and Bank of England tell markets tomorrow. To a certain extent Alcoa's results reflect what can be seen in other industries, slow demand growth - but growth all the same - and excess capacity. The company's shares traded 1.1% higher after the close despite that. The British Retail Consortium's (BRC) latest shop price inflation data released before the 'opening bell' also attests to some of the trends - possibly longer term in this case - which are to be seen in the market: namely, food price inflation. Shop prices, nevertheless, rose at the same clip in December as last month, by 1.5% year-on-year. International trade data will be released at 09:30 by ONS. On another front, the Financial Times has picked up this morning on business leaders' warning to the Prime Minister against damaging the economy by taking Britain out of the European Union (EU).Sainsbury tells investors celebrations are overSainsbury enjoyed record-breaking Christmas trading as it increased its market share in the last three months of 2012. But the firm warned the celebrations would probably not last into the new year. Third quarter total sales gain of 3.9%, +0.9% excluding fuel, which was largely in-line with estimates. "We expect the challenging economic backdrop to persist, with customers looking to re-balance their household budget after the festivities and so spending cautiously in the first few months of 2013," said Chief Executive Justin King.Housebuilder Galliford Try has announced that it remains on track to meet its full year expectations and that half year profit is ahead of its targets. Designer brand Ted Baker announced a solid rise in sales over the festive period as Chairman Robert Breare confirmed he will step down after more than 11 years in the role. David Bernstein, currently Senior Independent Non-Executive Director, will succeed Breare with immediate effect. Greggs sees its full year results broadly in line, although 'tough' trading conditions have continued into 2013.Egypt focused gold producer Centamin (one of yesterday's big gainers) has announced full year production of 262,900 ounces, ahead of the forecasts of 250,000 seen, and up 30%.Yesterday evening, after the close, Shire's (another one of yesterday's big gainers) Chief Executive Officer stated that he is increasingly confident of reaching double digit full year earnings growth and on meeting current consensus earnings expectations for 2013.AMEC up on Goldman upgrade Lastly, and as regards today's main broker recommendations, Goldman Sachs has upgraded AMEC to buy from neutral, while analysts at Bank of America have raised their view on shares of GKN and Meggitt to buy.Goldman has lowered Petrofac to neutral from buy.