MARKET UPDATE

Yesterday, being the first trading day of the 3rd quarter, investors basked in the warm sunshine whilst they enjoyed the momentum propelled by fresh funds going in to the market – FTSE up 64 points at 7377.  So it was probably fair to expect a bit of a back lash and some profit taking this morning.  So by 9.00am the FTSE 100 was down 29 points with mining and oil feeling a little pain across their respective backs.  However it was short-lived.  Stocks recovered their poise and by 3.05pm the FTSE had recovered, sticking its head just above the Plimsoll line – up 3 points 7380. Miners were up an average of 1%, despite Glencore adding 5.5% yesterday.  Oils were mixed but had improved since the opening – BP -0.25% and Royal Dutch Shell +0.5%. Pharmas were strong. Despite a downgrade by Behrenberg for HSBC (-0.75%) banks were OK – up an average of 0.75%. Utilities were not the flavour of the month thanks to UU and Severn Trent being downgraded.

 

J Sainsbury was only up 1% despite improved sales in the last quarter (LFL ex fuel +2.3%). Many believe that was down to Argos’s strong performance rather than the supermarket food activity.  We await news on the Nisa acquisition.  Justin King had 10 years as CEO and never posted a quarterly drop in sales.  Qatar now own 25% of J Sainsbury, the last 7% being purchased at 595%.  Since Mike Coupe replaced Justin King the share price has fallen from 365p down to 251p – a drop of 31.5% – not all Coupe’s fault – more down to no food inflation for about 3 years as well as Lidl and Aldi leaving their hobnailed boot prints all over the supermarket sector with visceral discounts. Imagination Technology saw its share price rise by 10% today with revenues up 19%, despite the arrogant and cruel treatment meted out by Apple, who will be bypassing Imaginations chip production.

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