Markets: Morrisons goes local for convenience

By DOMINIC JEFF
Published on 08/10/2012 22:42

SUPERMARKET chain Morrisons was yesterday’s biggest blue chip riser as it stepped up efforts to establish itself in the convenience store segment.

The firm, which has lagged behind rivals Tesco and Sainsbury’s in the market for smaller town centre stores, appointed a managing director for its “M Local” convenience brand late last week. It has now hired logistics management firm Wincanton to operate a distribution centre for the network.

Morrisons’ stock was 2 per cent higher at 283.9p, further aided by a broker note from Panmure Gordon saying the UK grocers were becoming a more attractive investment proposition. Tesco added 2p to 317.4p, while Sainsbury’s was 1.8p higher at 355p on a day when the wider market took a downwards turn on renewed concerns about the global economy.

The FTSE 100 shed 29.3 points at 5,841.7 after surging late last week following solid US jobs figures.

Angus Campbell, head of market analysis at Capital Spreads, said: “It was very much a case of back to reality with the World Bank slashing its growth forecast for East Asia, a part of the world that is a major driver of growth.”

In the second tier, FirstGroup shares continued to suffer in the wake of the Department of Transport’s decision to pull the award of the West Coast franchise and start the process again.

The removal prompted Deutsche Bank to reduce its profit forecasts for the firm for this and next year by 5 per cent and 16 per cent respectively, adding that it would maintain its “sell” recommendation. Shares in the Aberdeen-based firm fell another 3 per cent, off 2.7p to 190.8p, compared with 244p prior to the shock announcement last week.

NEW YORK: Wall Street slipped in light trading last night, 
stock markets pulling back from recent five-year highs ahead of an earnings season expected to be weak.

The Dow Jones industrial 
average dropped 26.50 points, or 0.19 per cent, to end the day at 13,583.65 while the broader Standard & Poor’s 500 Index shed 5.05 points, or 0.35 per cent, to finish at 1,455.88.

The Nasdaq Composite Index fell 23.83 points, or 0.76 per cent, to close at 3,112.35.