The FTSE 100 was lower on Thursday as investors digested mixed festive trading updates from Tesco, AB Foods, and Marks & Spencer.
London’s leading index was down 0.2% at 10,028 at the time of writing.
Although there will be underlying concerns about geopolitics and what Donald Trump will do next after threatening military action to take Greenland and seizing more oil tankers, there was enough on the corporate front to keep UK-focused traders busy with a raft a festive trading updates.
Tesco shares fell, AB Foods tanked, and Marks & Spencer received a favourable market reaction, after releasing their respective updates.
On the face of it, Tesco’s Christmas trading update wasn’t that bad. Market share was the highest in a decade and group Christmas sales rose 2.4%. But this wasn’t enough for investors with lofty expectations after a strong run in the stock last year, and shares sank 4%.
“Tesco’s share price had a great 2025, but it was accompanied by a sharp increase in its valuation. The consequence of this has been clear this morning,” explained Chris Beauchamp, Chief Market Analyst at IG.
“Simply reporting good numbers isn’t enough to avoid a share price fall, and having fallen short on Q3 sales investors have been given a reason to sell and await a better set of figures.”
Marks & Spencer, on the other hand, had a much better response to their festive trading period. Shares rose on Thursday
“The festive period delivered a respectable showing in food, with like-for-like sales up 5.6 per cent, but that’s where the Christmas cheer ended. Clothing, home and beauty slipped 2.9 per cent, a reminder that the aftertaste of last year’s cyber-attack still lingers,” Mark Crouch, market analyst for eToro said.
“It’s perhaps unsurprising that food once again did the heavy lifting, underlining the strength of M&S’s core proposition. Yet investors are unlikely to be sweet-talked by groceries alone. The proof, as ever, is in the pudding, and M&S shares are down around 20 per cent since October, signalling doubts that last year’s fallout has been contained.”
The differing reactions to Marks & Spencer’s and Tesco’s results are largely due to share price performance leading up to the results. Marks & Spencer had a torrid end to the year as investors counted the cost of a cyberattack, while Tesco added 50% from its April low to its November high.
Primark-owner was the FTSE 100’s top faller, tanking 11%, after issuing a profit warning amid poor sales at the retailer.
“Primark has had a challenging start to the financial year, with a mixed performance,” said George Weston, Chief Executive of Associated British Foods.
BAE Systems was the FTSE 100’s top riser after Donald Trump announced he would like the US to increase its defence budget to $1.5 trillion from $1 trillion and called on manufacturers to invest in new plants rather than distributing cash to shareholders.
“The proposed sharp increase in the defence budget would be good news for defence contractors, explaining why shares have rallied across the sector,” said Russ Mould, investment director at AJ Bell.
“BAE Systems jumped more than 6% while US names such as Lockheed Martin moved in a similar fashion in pre-market trading.”