The Morning Call - J Sainsbury's lifts sales by 2.7%, with the CEO citing strong Q1 performance

Highlights of the Day

Asian Markets

Asian shares turned lower as earlier gains were quashed by tensions on the Korean peninsula after North Korea fired a missile that landed in Japanese waters, deepening concerns over the isolated nation’s nuclear capabilities.

U.S. Markets

U.S. shares rose in abbreviated trading as banks continued to climb along with interest rates, and energy companies rallied again with oil prices. Better-than-expected auto sales and a strong report on U.S. factories also boosted stocks.

Today's News

The most dovish member of the Bank of England’s Monetary Policy Committee is sticking to his view that now is not the time to raise rates, despite a growing sense in financial markets that the central bank is gearing up to increase the cost of borrowing. In an interview with The Independent, Gertjan Vlieghe, an external member of the MPC, said: “This is an environment where a premature hike would be a bigger mistake than one that turns out to be slightly late”.

Japanese Foreign Minister Fumio Kishida is set to finalize a broad agreement on a free trade deal with the European Union this week, before its expected official announcement, Tokyo said. “It is extremely important to reach a broad agreement early and raise the flag of free trade amid protectionist moves seen worldwide,” Prime Minister Shinzo Abe told a cabinet meeting, according to Jiji Press. Kishida is scheduled to hold talks with EU Trade Commissioner Cecilia Malmstrom, who was in Tokyo over the weekend for two days of talks on the proposed trade pact.

Sainsbury has lifted its Q1 retail sales byu 2.7%, excluding fuel, with like for like sales up 2.3% also excluding fuel. The company also boosted grocery dales by 3.0%, and enjoyed transaction growth of 1.9%. CEO Mike Coupe said Sainsbury had delivered a strong Q1 performance. “We have seen strong food sales where we have invested in product innovation, such as our new Summer eating ranges.

Marshall Motor Holdings said, given the strong performance during H1, its current FY outlook was now ahead of its previous expectations. It had delivered a strong performance during H1, particularly in Q1. “The board is cognisant of the economic and political uncertainty following the UK referendum on EU membership and industry forecasts for continuing declines in the UK new car market,” the company said.

Facebook could be next in the sights of the competition authorities after Google’s record €2.4 billion fine from the European Commission. In a case of international significance, Germany’s cartel office is investigating claims that the social media and publishing company forces users to sign away their privacy rights for fear of social isolation.

Oil prices retreated, halting a run of eight straight days of gains on signs that a persistent rise in U.S. crude production is running out of steam.

Gold edged higher, supported by an easing dollar, but was still near seven-week lows hit in the previous session when it posted its biggest one-day percentage loss since November.

Companies Reporting this week

Day	Companies
Today:	St. Modwen Properties * Sainsbury (J) *
Tomorrow:	Ocado Group * SIG * Topps Tiles * Booker Group * Persimmon * McCarthy & Stone
Thursday:	* Ferrexpo * Bovis Homes Group * Associated British Foods *
Friday:	Dunelm Group *

Early Market Movements

Market	Index	Change	% Change
UK 100	7,340.3	-36.8	-0.5%
UK 250	19,252.5	-68.0	-0.4%
GER 30	12,427.1	-48.2	-0.4%
FRA 40	5,170.7	-25.0	-0.5%
U.S. 30	21,479.27	+129.6	+0.6%
U.S. 500	2,429.0	+5.6	+0.2%
OIL (BRENT)	49.48	-0.2	-0.4%
GOLD	1,225.74	+5.54	+0.5%

UK Risers & Fallers (8:15am)

Company	Price	Change	% Change
Worldpay	340.6	+21.1	+6.6%
Paypoint	875.75	+11.25	+1.3%
Fresnillo	1477	+11	+0.8%
Acacia	274.4	-12.9	-4.5%
Rio Tinto	3324	-50.5	-1.5%
Anglo American	1049.5	-15.5	-1.5%

Latest Broker Views

Company	Broker	Recommendation	Price	Target
HSBC Holdings	Berenberg	Hold	721.80	600.00
Reckitt Benckiser Group	Berenberg	Buy	7,755.00	8,500.00
Royal Dutch Shell	Barclays Capital	Overweight	2,062.00	2,750.00
SIG	Deutsche Bank	Hold	147.70	155.00