January 11, 2018 / 10:00 AM / 9 months ago

FTSE dragged down by Tesco, M&S results; mining shares offer support

* FTSE 100 down 0.1 pct, mid-cap index down 0.3 pct

* Tesco, M&S, Card Factory down after Christmas updates

* But strength in mining companies provides support

By Danilo Masoni

MILAN, Jan 11 (Reuters) - Underwhelming Christmas updates at retailers Tesco and Marks and Spencer weighed on UK’s top share index on Thursday, although stronger metal prices supported mining shares.

The FTSE 100 benchmark was down 0.1 percent at 7,741 points by 0910 GMT. The mid-cap index fell 0.3 percent.

Tesco fell 3.9 percent and contributed the most to the FTSE’s decline. The country’s biggest retailer missed forecasts for Christmas trading as lower demand for general goods offset strong sales of fresh food.

Some investors still welcomed Tesco’s third-quarter results, which showed UK like-for-like sales growth rose to 2.3 percent from 2.1 percent in the second quarter.

“Lots to be positive about for Tesco as the Dave Lewis turnaround continues to yield results. Q3 was strong ... with a particularly good performance in Fresh Food,” said Neil Wilson, analyst at ETX Capital.

Sainsbury’s, Britain’s second-largest supermarket, and fourth-ranked Morrisons both beat forecasts for Christmas trading but fell 0.7 percent and 1 percent respectively.

Marks and Spencer shares fell 5.6 percent, the biggest loss on the FTSE. Sales of both clothing and food beat expectations in the key Christmas quarter, but the company kept unchanged its guidance for its full 2017-18 year.

Mid cap retailer Card Factory slumped 14 percent, also on the back of its Christmas update.

Barratt fell 2.5 percent, after it posted a flat sales rate in the last six months of 2017. Taylor Wimpey continued a slide from the previous session when it said full-year results for 2017 would be in line with expectations.

Among the gainers, Just Eat led with a rise of 5.7 percent, underpinned by a Barclays upgrade to “overweight” on expectations of strong revenue momentum in the fourth quarter and the year 2018.

Bunzl rose 1.5 percent after the outsourcer detailed the impact of the U.S. tax overhaul and announced the acquisition of two companies in the United States and the UK .

Stronger metal prices lifted shares in big mining companies including BHP Billiton, Rio Tinto and Anglo American. Financials pulled back, led lower by a 1.6 percent fall in Barclays. (Reporting by Danilo Masoni, Larry King)

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