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FTSE falls as Royal Mail shares are hit Christmas sales boost drives up Halfords shares
(about 3 hours later)
London's stock market opened lower, with shares in Royal Mail falling sharply after it delivered a disappointing trading update. Shares in Halfords jumped after the bike and car parts retailer reported a "strong sales performance" for the crucial Christmas period.
Shares in the company dropped 4.3% to 430.10p after it reported a fall in the number of letters delivered. The FTSE 250 firm said like-for-like sales rose 5.9% in the three months to 15 January, sending its shares up 8.7%.
Halfords also said it had paid £8m for a minority stake in mobile tyre-fitting business TyresOnTheDrive.com.
On the wider market, the benchmark FTSE 100 index was down 37.49 points at 7,210.12 shortly after midday.
Royal Mail was the biggest faller on the index after it delivered a disappointing trading update.
Shares in the company dropped 5% to 426.70p after it reported a fall in the number of letters delivered.
In the nine months to 25 December, the volume of letters delivered fell 6% while letter revenues were down 5%.In the nine months to 25 December, the volume of letters delivered fell 6% while letter revenues were down 5%.
"We are seeing the impact of overall business uncertainty in the UK on letter volumes," it said. "We are seeing the impact of overall business uncertainty in the UK on letter volumes, in particular advertising and business letters."
Royal Mail added that this had been seen "in particular" in advertising and business letters.
However, its parcels business saw revenues rise by 3% with the number of parcels delivered 2% higher.However, its parcels business saw revenues rise by 3% with the number of parcels delivered 2% higher.
Royal Mail was the biggest faller in the FTSE 100, with the UK's benchmark share index down 15.08 points at 7,232.53 in early trade. Back in the FTSE 250, shares in Moneysupermarket.com rose 5.5% after it said full-year results were set to beat expectations, with operating profits up 8%.
In the FTSE 250, shares in Moneysupermarket.com jumped 9% after it said full-year results were set to beat expectations, with operating profits up 8%. However, the news from Pets at Home was not so encouraging. Its shares fell 8% after it reported "subdued trading" at its merchandise division, with like-for-like sales at the unit down 0.5%.
Halfords was another company benefiting from an upbeat trading update. Its shares rose 7% after the car parts and bike retailer reported a "strong sales performance" for the crucial Christmas period, with like-for-like sales up 5.9% during the three months to 15 January. On the currency markets, the pound rose 0.5% against the dollar to $1.2323 and was 0.2% higher against the euro at 1.1558 euros.
However, the news from Pets at Home was not so encouraging. Its shares fell more than 8% after it reported "subdued trading" at its merchandise division, with like-for-like sales at the unit down 0.5%.
On the currency markets, the pound rose 0.5% against the dollar to $1.2318 and was 0.2% higher against the euro at 1.1555 euros.