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What happened in the stock market this week

Photo credit: Rafael Matsunaga. Licence: http://creativecommons.org/licenses/by/2.0/

Struggling to keep up with market events?  No problem. Here’s what you may have missed over the last five days.

Monday 

Investors were in a cautious mood ahead of a key speech by PM Theresa May on Tuesday. Banking stocks and housebuilders both suffered on renewed hard Brexit fears. Royal Bank of Scotland was the FTSE 100’s biggest loser on the day, falling 2.76% after analysts cut their earnings forecasts. Shares in Barclays and Lloyds also fell. 

On a brighter note, several miners — including giants such as BHP Billiton, Glencore and Rio Tinto — registered gains thanks to analysts increasing their target prices.

Tuesday

Tuesday brought confirmation that Britain would leave the EU’s single market while attempting to negotiate a free trade deal with the bloc. A rise in sterling, possibly on the back of greater certainty, led the FTSE 100 index to close down 1.48%. In other news, we learned that inflation had surged by more than expected, with the consumer price index rising to 1.6% in December compared to 1.2% in November. This was blamed on higher import costs being passed on to consumers.

Rolls Royce was the top performer on the day, gaining 4.44% after it agreed to cough up £671m to settle bribery and corruption cases in the UK and the US.  True to form, the market preferred certainty — albeit via a large fine — over the unknown.

Wednesday

Most investors crave consistency — but holders of Pearson got none. Many headed for the exits as the troubled publisher released yet another profit warning. At the close, almost 30% had been wiped off the value of the firm. Outsourcer Mitie also warned on profits while welcoming a new finance director. Shares slid almost 5%.

Burberry rose 3.58% after the luxury fashion business revealed a 4% growth in underlying retail sales over the third quarter. JD Wetherspoon also advanced (by 3.94%) after it announced that expectations for its full-year results had now “slightly improved” despite a drop in sales over the second quarter.

Thursday

As Theresa May charmed business leaders in Davos, Royal Mail‘s admission that revenues were flat for the nine months to Christmas Day saw its share price drop 6%. Shares in retailer Pets At Home fared even worse, dropping over 10% after it reported subdued merchandise sales over the third quarter. This was despite stating that its profit outlook for the year remained in line with expectations.

In sharp contrast, Halfords was a strong riser after revealing that trading over the festive period had been better than hoped, leading the company to maintain its profit expectations for the whole year. FTSE 250 peer Moneysupermarket.com was up just under 8% after estimating that revenue would be roughly 12% higher on the year. Clothing retailer N Brown was also in investors’ good books as it reported a 4.1% increase in group revenue for the 18 weeks to the end of 2016, thanks to strong performance on and around Black Friday.

Friday

No surprise that Friday’s headlines were dominated by the inauguration of President Trump. Despite a flat market in general, shares in FTSE 250 chemical company Synthomer jumped after announcing that “positive trends” seen in North American and European business over the last nine months had continued into the final quarter. Elsewhere, there were broker upgrades for Whitbread, National Grid and WPP and shares in BT rose after it said it would increase prices across its broadband, phone and sports services.

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Paul Summers owns shares in Rolls-Royce Group. The Motley Fool UK has recommended Barclays, Burberry, and Moneysupermarket.com. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.