Food retailers staged a comeback after they emerged largely unscathed from the Competition Commission’s investigation into the grocery market. Good fourth-quarter figures from Asda helped, confirming that food retailers as a group have been doing well.

Following publication of the Commission’s remedies statement, broker Bernstein noted that “the proposed remedies are likely to have only limited impact on operations, performance and prospects” of the quoted grocers.

Blue Oar Securities said: “The recommendations could have been far worse – the Commission is not requiring divestments of any stores or land holdings.”

Leading fund manager Andy Brough of Schroders is understood to have bought a 3 per cent stake in Sports Direct, contributing to the controversial retailer’s gradual City rehabilitation. Broker Pali International became the latest to visit Sports Direct’s Shirebrook head office, as the retailer apparently makes more effort to communicate with investors.

Seymour Pierce moved computer entertainment group Game from hold to buy. Game gave the best Christmas retail performance and the outlook continues to be good. The broker said: “The stock should continue to trade at a premium and, quite apart from company-specific positives, it looks a good option for investors to participate in any upwards sector re-rating.”

Buy WHSmith, recommended Oriel. The broker argued that the forthcoming sale of airports retailer World Duty Free would likely highlight “the value of WHSmith’s hidden jewel – its travel business”. Oriel said that WHSmith, which is returning£90 million to shareholders this year, looked cheap on a variety of measurements.

Kingfisher was due to post fourth-quarter figures as Retail Week went to press. Ahead of the statement, JP Morgan downgraded the DIY group from neutral to underweight because Kingfisher looked expensive when compared with peers.

Investec stuck to its sell stance, worried that there is little evidence so far that a “sustainable turnaround” at flagship chain B&Q’s fortunes is imminent. ING, however, recommended buy and advised investors to use the present uncertainty “to increase exposure to what we believe is a very cheap stock.”

Marks & Spencer remains on Kaupthing’s buy list, despite press reports that the retailer has lost womenswear market share. The broker said: “While this will undoubtedly raise some eyebrows, share data is regularly off target.” January data can be particularly unrepresentative, said Kaupthing, because of the impact of Sales.

Next week, interest is likely to focus on value fashion chain Primark, whose parent ABF issues an update on Monday.

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