M&S post profits in flat session

Tuesday, 24 May 2011

European stocks were set to edge higher on Tuesday after sharp falls in the previous session, with commodity shares seen giving some support although lingering concerns about the euro zone debt problems could limit gains in the broader market.

"Sentiment in Europe is expected to be volatile. Contagion fears are growing following the weekend's downgrade of Italy and the political instability in Spain," advanced Jonathan Sudaria, night dealer at Capital Spreads.

European shares dropped 1.7 percent on Monday hitting a five-week closing low as worries about the euro zone peripheral countries intensified. But, over in Asia stocks were steady on Tuesday following sharp falls in the previous session, while Wall Street closed at a month's low on Monday on global slowdown worries. Following this path, the FashionUnited Top 100 Index closed in 1308.07, down by 10.41 points.

In the UK, beloved national retailer Marks & Spencer reported Final Year adjusted pretax profit of GBP714.3 million, as oppose to the analysts estimates for GBP711 million. Despite the "in line" numbers the company shares have fallen over 2% on the open, as the retailer gave a very cautious outlook. In its statement the company said it is cautious about prospects due to the squeeze on consumers’ disposable incomes and rising prices for commodities. Marks & Spencer's share price has seen a strong rally over the last quarter as revamps of clothing lines and increased offerings at the companies’ food outlets have successfully won Marks & Spencer market share, under the guidance of new CEO Marc Bolland. However analysts now take the view that the further store revamps planned may only have limited impact as adverse headwinds for consumers will impact the sector as a whole. M&S said it will pay a final dividend of 10.8p per share, an increase of 14%. CDS is 1.5bps tighter at 146bps.

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