Stocks in London closed higher on Wednesday as strong quarterly figures from US sportswear brand Nike gave a boost to retail stocks in the FTSE 100 in a positive read-across.
The FTSE 100 index closed up 126.70 points, or 1.7%, at 7,497.32. The FTSE 250 ended up 318.89 points, or 1.7%, at 18,863.65, and the AIM All-Share closed up 7.89 points, or 1.0%, at 829.63.
The Cboe UK 100 ended up 1.7% at 749.67, the Cboe UK 250 closed up 1.8% at 16,310.42, and the Cboe Small Companies ended up 1.7% at 13,116.59.
In European equities on Wednesday, the CAC 40 in Paris ended up 2.0%, while the DAX 40 in Frankfurt ended 1.5% higher.
Sportswear and shoe manufacturer Nike reported a double-digit rise in second quarter revenue on Tuesday.
In the three months ended November 30, revenue rose 17% against the previous year, climbing to $13.32 billion from $11.36 billion as cost of sales jumped 24% to $7.60 billion from $6.14 billion.
Russ Mould at AJ Bell said the revenue growth - the best quarterly rise in a decade - was ‘testament to the brand’s inherent strengths.’
The US-listed firm was up 13% in New York at the time of the London equities close. In London, retail stocks like JD Sports and Frasers were lifted by the US brand’s strong performance.
JD Sports finished 6.1% higher, while Sports Direct-owner Frasers closed up 3.0%. Next was up 3.0%.
In other retailing news, the Confederation for British Industry’s latest monthly survey showed an improvement in sales in the run-up to Christmas.
The CBI’s headline retail sales balance was positive 9% in December, compared with the same month last year. This was a rebound from a 19% fall in November and came despite predictions of lower sales for the month.
In the FTSE 250, Carnival closed up 3.7% after the cruise operator posted a smaller annual loss as the firm recovered from Covid-19, with a jump in revenue.
For the year that ended November 30, Carnival said its pretax loss narrowed to $6.08 billion from $9.52 billion a year prior. Revenue surged to $12.17 billion from $1.91 billion.
Occupancy in the fourth quarter was 19% below the pre-pandemic 2019 level, improved from 29% below in the third quarter.
It said it expects to return to profit in financial year 2023, with adjusted earnings before interest, tax, depreciation and amortisation expected between $250 million and $350 million.
Ferrexpo finished 2.2% higher as it reported that it is now receiving enough power to bring one pelletiser back into operation in central Ukraine.
Ferrexpo said approximately 300,000 tonnes of pellets had been produced so far in the fourth quarter, ‘as a result of interruptions, and continued instability, within the state-owned electricity network that have been experienced in the fourth quarter of 2022’.
The company suspended operations in October, when a Russian missile strike damaged state-owned electrical infrastructure nearby, leaving Ferrexpo with a limited power supply.
On AIM, Infrastructure India plunged 11% as its half-year loss trebled in the the six months ended September 30 to £62.2 million, from £21.2 million a year before.
Infrastructure India said net assets were negative £85.7 million at September 30, widening from negative £46.8 million on March 31, and swinging from net assets of positive £72.1 million a year ago.
‘The consensus outlook for India is, however, generally positive so long as the global uncertainties and inflation don’t weigh too heavily on domestic demand,’ the company said.
Stocks in New York were higher at the London equities close, with the DJIA up 1.6%, the S&P 500 index up 1.5%, and the Nasdaq Composite 1.6% higher.
The euro stood at $1.0612 at the London equities close on Wednesday, lower against $1.0627 at the close on Tuesday. The pound was quoted at $1.2093, down compared to $1.2139.
UK public sector borrowing ballooned in November, according to Office for National Statistics, due to the government’s energy support schemes and high inflation.
Public sector net borrowing excluding public sector banks jumped to £22.0 billion, which was £13.9 billion higher than in November of 2021. Borrowing reached its highest level for November since monthly records began in 1993, ONS said.
The dollar recovered some ground against the Japanese yen at the London equities close on Wednesday, but remained substantially weaker following the surprise policy shift by the Bank of Japan.
Against the yen, the dollar was trading at JP¥132.08, higher compared to JP¥131.27 late Tuesday.
Japan’s central bank tweaked its longstanding monetary easing programme on Tuesday. The change marks a rare shift of gears for the dovish central bank, which has largely left its policy intact even as counterparts in other major economies hike rates to tackle inflation.
ING’s Francesco Pesole said the yen closing the year above JP¥130.00 may be a ‘welcome development’ at the Bank of Japan as it ‘could signal that speculation on further policy normalisation has - for now - been kept in check.’
However, Pesole added it was worth remembering that the dollar rose in each of the past four years in January. ‘Our view for early 2023 is still one of dollar recovery.’ he said.
Brent oil was quoted at $81.68 a barrel at the London equities close on Wednesday, up from $79.88 late Tuesday. Shell and BP were lifted by oil rising price, with Shell closing 2.4% higher and BP up 2.8%.
Gold was quoted at $1,815.20 an ounce at the London equities close on Wednesday, a touch higher against $1,814.62 at the close on Tuesday.
In the economic calendar on Thursday, the US will publish its weekly unemployment insurance claims at 1330 GMT. Overnight, Zoopla will release its house price index. Meanwhile, it’s a quiet day for the UK corporate calendar with no events scheduled.
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