Woolworths managed to lighten the gloom with the news that its retail arm will return to profit this year, but the sector was still down following lacklustre updates from Marks & Spencer and Tesco.

Panmure Gordon welcomed Woolies’ improved prospects as “a significant achievement” and said the retailer was undervalued.

M&S directors bought shares as the retailer’s price slumped in the week. Citi argued that M&S was undervalued, but cut its target price from 620p to 500p.

JP Morgan retained its underweight stance on Tesco, after disheartening growth at Christmas. The decision was “based on the expectation that the stock derates as UK growth slows”.

Tesco’s rival Sainsbury’s update impressed. On Wednesday, Sainsbury’s acquired two supermarkets in Northern Ireland from local player Curley’s.

Sports Direct tycoon Mike Ashley upped his stake in John David Group from 10 to more than 11 per cent. JD was the week’s highest riser, as Christmas trading impressed. Also stakebuilding was Laura Ashley investment vehicle Bagley, which nudged up its holding in potential Baugur takeover candidate, Moss Bros.

Middle East entrepreneur Micky Jagtiani increased his stake in Debenhams. The department store posted a rise in Christmas like-for-likes and was dubbed a “relative winner” by Deutsche Bank, advising hold.

The busiest period of Christmas updates is over, but there will still be interest in the sector next week, when Sports Direct and Morrisons are expected to report.