Retailers and housebuilders were leading an attempt at a pre-Christmas rally on the London Stock Exchange on Wednesday, amid some positive indications of consumer demand.
The FTSE 100 index was up 63.01 points, 0.9%, at 7,433.63. The FTSE 250 was up 173.01 points, 0.9%, at 18,717.77, and the AIM All-Share was up 2.41 points, 0.3%, at 824.15.
The Cboe UK 100 was up 0.9% at 743.65, the Cboe UK 250 was up 1.1% at 16,193.01, and the Cboe Small Companies was up 0.4% at 12,872.93.
In Paris, the CAC 40 stock index was up 1.0%, while the DAX 40 in Frankfurt was up 0.7%.
Sterling was quoted at $1.2112, lower than $1.2139. The euro traded at $1.0616, edging down from $1.0627. The dollar was quoted at JP¥131.91, up versus JP¥131.27.
Stocks in New York were called to open higher. The Dow Jones Industrial Average was called up 0.7%, the S&P 500 index up 0.5%, and the Nasdaq Composite up 0.3%.
There is a consumer confidence survey from the US at 1500 GMT.
In economic news, UK public sector borrowing ballooned in November, according to Office for National Statistics, due 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 November of 2021. Borrowing reached its highest level for November since monthly records began in 1993, ONS said.
‘How much extra pain the fallout from the mini-budget has heaped on government finances will be dissected in future months, but the ONS notes that market interest rates for gilts have risen and have had to be sold at a discount. Retailers fully understand the issues of having merchandise that’s lost its lustre and requires a deft hand with a red pen, but the UK government isn’t used to having its debt marked down the way it was in the autumn and will have had to sell more gilts just to make ends meet,’ AJ Bell’s Danni Hewson considered.
Gold was quoted at $1,812.45 an ounce midday Wednesday, lower than $1,814.62 on Tuesday.
In the FTSE 100, JD Sports was the top performer, up 6.0%, in a positive read-across from athleisure goods maker Nike. The US listing was up 12% in the New York pre-market on Wednesday, after late Tuesday reporting strong revenue growth. Nike peer adidas was up 6.9% in Frankfurt.
In other retailing news, there was an unexpected rebound in UK sales over the year to December but positivity could be ‘short-lived’ amid continued pressure on budgets, according to new figures.
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.
On the London Stock Exchange, Frasers, owner of Sports Direct, was up 2.7%, and Next added 2.4%.
BP and Shell were up 1.9% and 1.7%, respectively, despite little progress in oil prices. Brent oil fetched at $80.69 a barrel at midday in London, edging up from $79.88 late Tuesday.
At the other end of the index, Bunzl lost 1.0%, despite guiding for strong growth in 2022.
Revenue is set to grow 17% year-on-year, or by 10% at constant currency. This is due to ‘inflation driving underlying revenue growth and the impact of acquisitions further supplementing growth’, the distribution services firm said.
Bunzl said its operating margin is expected to be slightly ahead of prior guidance, and will be in line with 2021.
Looking ahead to 2023, Bunzl expects revenue to grow slightly, with adjusted operating profit to be ‘resilient’. Adjusted earnings per share are expected to be ‘moderately’ lower from 2022, however.
Housebuilders were higher in midday trade. Persimmon was up 1.6%. Barratt was up 1.5%, and Taylor Wimpey added 1.4%.
This comes as HMRC figures show that UK house sales remained slightly higher than pre-pandemic levels in November. Across the UK, an estimated 107,190 house sales took place in November, which was 13% higher than November 2021.
‘Transaction numbers are holding up, particularly as we would expect things to start to slow down as we approach Christmas,’ commented Mark Harris, chief executive of mortgage broker SPF Private Clients.
‘Buyers with good mortgage offers are keen to complete before they expire, while others have to move for whatever reason, even if the market is more difficult than it has been.’
On AIM, Thor Mining added 5.8%, after initial drilling results showed high uranium prospectivity at two 100% owned projects in Colorado.
The London-based Australia and US-focused exploration and development company said its recently completed drilling programme confirmed high uranium prospective at both the Wedding Bell and Radium Mountain projects.
The company said drilling results showed 2.1 metres at 0.036% triuranium octoxide at the Groundhog prospect, including 0.3 metres at 0.14% triuranium octoxide.
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