General retailers underperformed as questions were asked about whether the stores rally had run too far.

Broker ING struck a cautious note and said: “While we are not suggesting the sector will revisit the relative lows of 2008, we are a little concerned as to what extent this current momentum is sustainable into the second half of 2009.”

Sainsbury’s celebrated an 11 per cent advance in underlying full-year profit and chief executive Justin King was confident that the grocer’s brand heritage and agility would continue to deliver. Broker Bernstein welcomed the “solid progress” being made, but thought that was reflected in the valuation and there is better value elsewhere.

Marks & Spencer will reveal preliminary results on Tuesday, when Pali International expects the retailer to flag up a good start to the new year following a good April and Easter. However, the broker said: “The year is yet young, and we have not changed our forecast of a fall to pre-tax profits of only £460m in 2009/10 and a dividend cut, given the renewed pressures likely to transpire in the market and M&S’s market share.”

Speculation was rife again that Debenhams was preparing a £500m rights issue. Seymour Pierce increased its profit forecasts for this year and next, but rates the department store group a sell on valuation grounds.

Broker Singer noted “ongoing progress” after a B&Q store visit. The broker has no formal rating on Kingfisher but said: “Kingfisher is becoming a must-have core holding in the retail sector and the scope for further progress means that non-holders should not feel they have completely missed out.”

Carphone Warehouse’s Talk Talk subsidiary paid £236m for Tiscali’s UK operations, making it the biggest residential broadband provider in Britain. Investec shifted its stance on Carphone from hold to sell and said: “The shares have run too far, too fast on a cyclical re-rating that is inappropriate given about 80 per cent of profits are from telecom assets.”

HSBC remains concerned about the impact of foreign exchange pressures on retailers and stores’ ability to mitigate the impact, particularly by toughening supplier terms. The broker said: “Retailers that proclaim in coming months they have secured lower input costs may be exposing themselves to higher operational risk.

“Switching to lower-cost countries would increase the chances of quality and delivery problems, at least in the short term as new trading relationships are established.”

Among the retailers expected to report next week are Burberry and Mothercare.