UK Midcap Stocks Rebound Amid Retail Sector Struggles and Bond Market Tensions

The UK's midcap stocks rebounded despite retail sector challenges and bond market selloffs. Marks and Spencer recorded strong food sales but anticipates economic hurdles, impacting shares. Retailers like B&M and Greggs faced setbacks, while midcap stocks ended the day with gains amid concerns over borrowing costs and planned tax hikes.

On Thursday, UK's midcap stocks staged a recovery after plunging to an eight-month low during the session. The rebound occurred against the backdrop of nervousness in bond markets, despite a steep drop in retail stocks influenced by lackluster Christmas trading reports.

Marks and Spencer announced a promising rise in like-for-like food sales over the Christmas period. However, the warning about upcoming cost pressures led to an 8.4% fall in its share value. Similarly, Tesco saw a 0.5% decline after sticking to its existing profit forecast.

The retail index suffered a 1.3% decrease, largely due to B&M's lowered profit forecast and Greggs's modest sales growth. Despite these setbacks, the FTSE 250 index finished 0.3% higher, buoyed by miners and a weaker pound boosting the FTSE 100 to a near four-week high.

(With inputs from agencies.)