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Market Report: Debenhams shares traded at a 22-month low after a profit warning

  • @LauraHChesters

Hedge funds and short sellers are betting against sportswear billionaire Mike Ashley when it comes to department store Debenhams.

Demand to borrow shares in Debenhams in order to short them is at a record high at 5.2 per cent according to data from financial research group Markit. It found a 50 per cent rise in the number of short sellers since the start of the year and Debenhams' profit warning. The stock reacted with a 2.1p or 2.46 per cent tumble to 83.2p yesterday. Markit's data revealed investors have been betting that Debenhams' shares have further to fall but Mr Ashley's Sports Direct bought a 4.63 per cent stake last week. The price paid for the 6.8 million shares is still below the current share price. But Markit said Debenhams saw "resurgent short interest after the lacklustre trading update". The shares traded at a 22-month low of 71p after it issued a profit warning on New Year's Eve, but recovered to 85p after Mr Ashley's stake was revealed.

In contrast, former struggling retailer Thorntons got a boost from analysts at Charles Stanley, who began covering the chocolate retailer with a buy and a 200p price target. The shares gobbled up a 10.25p gain to 143.25p.

The wider market recovered its poise after a blip on Tuesday and Manoj Ladwa at broker TJM Partnership said: "Equities across Europe closed in positive territory with encouraging comments from the World Bank whetting investors' appetites." The FTSE 100 advanced 53 points to 6,819.86 – breaking the 6,800 barrier for the first time since May last year.

Renewed fears of strikes in South Africa's platinum belt did not put punters off Anglo American's shares, following a buy note from UBS. UBS upgraded Anglo from neutral to buy and believes its new management will "deliver self-help"; Anglo jumped 70p to 1,332.5p – top of the table.

A close second was luxury fashion group Burberry after better than expected third quarter sales growth, and it surged 68p to 1,537p.

On the mid-tier table, iron-ore producer Ferrexpo suffered a downgrade from UBS on the risks in Ukraine, and it lost 4.2p to 172.5p.

AIM-listed Greka Drilling reported a $15m (£9m) drilling order in China and jetted 0.375p to 12.875p.