Market Report: M&S loses its spark as the City fears a Christmas turkey in its results

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The hangover for Marks & Spencer shares extended into the New Year as all the signs pointed to another less-than-festive performance for its struggling clothing division.

The High Street stalwart, which has reportedly sacked the head of its new loyalty scheme for alleged racist language, dropped 12.8p — a 2.8% fall — to 439.6p ahead of Thursday’s Christmas trading update.

The City fears it could be almost as bad as last year’s. That was exacerbated by online distribution issues at the M& warehouse, and analysts at Nomura predict 2015 could come close with a 5.5% dive for underlying sales.

Credit Suisse cut its target price to 475p on Monday.

A strong showing from its food division is likely to offer chief executive Marc Bolland a crumb of comfort, but it will probably not be enough to convince the sceptics that his masterplan is working.

The shares have fallen 100p since November as the cold weather failed to arrive in the UK, sparking concerns about sales of winter ranges.

Conditions have caused similar problems at rival Next, which reveals all about Christmas sales on Tuesday. Its slide continued, down 90p to 7200p.

Deutsche Bank’s stockpickers reckon there is value among retailers, but upgrades for Dixons Carphone, down 4p at 496p, and online fashion house Asos, 97p cheaper at 3354p, failed to prop up the stocks.

Ocado continued on its slippery slope, down 9.4p to 294.7p, as concerns grow over the ramping up of Amazon’s rival grocery delivery service Pantry.

According to FCA data, short-selling of Ocado shares is at its highest since May 2013. As many as 11.8% of the shares are being borrowed by investors betting against the stock.

Aside from retailers, miners were the biggest laggards, digging the FTSE 100 down 121.36 points to 6120.96.

Grainger was 6.7p better off at 239.5p after offloading its retirement arm, prompting broker Numis to upgrade the FTSE 250 private landlord to Buy.

Trendit, the first listing of 2016 in a £4 million raise, fared well on debut, climbing to 6.49p after floating at 5.53p a share.

Castle Street Investments, the shell created when Cupid sold its dating businesses, bought IT services firm Selection Services for £34.8 million, funded by a £30 million placing. The shares will remain suspended until shareholder approval.

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January 5, 2016 |
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