Stocks in London opened higher on Thursday, with the focus on the latest festive updates for large-cap retailers.
The FTSE 100 index opened up 28.37 points, or 0.4%, at 7,710.70. The FTSE 250 was up 62.33 points, 0.3%, at 19,388.73, and the AIM All-Share was 0.61 of a point, 0.1%, at 754.76.
Retailers Next and JD Sports were the best and worst performing blue-chip stocks respectively, after both provided trading updates including the Christmas period.
The Cboe UK 100 was up 0.3% at 769.45, the Cboe UK 250 was up 0.4% at 16,841.68, and the Cboe Small Companies was up 0.1% at 14,879.58.
In European equities, the CAC 40 in Paris was up 0.2%, while the DAX 40 in Frankfurt was up 0.3%.
Sterling was quoted at $1.2687 early Thursday, higher than $1.2646 at the London equities close on Wednesday. The euro traded at $1.0938, higher than $1.0915. Against the yen, the dollar was quoted at JP¥143.61, higher than JP¥143.50.
In the FTSE 100, Next rose 4.1%. The retailer said full price sales during November and December were better than it anticipated.
In a trading update covering the nine weeks to December 30, Next said full price sales were up 5.7% from a year earlier, which was £39 million than its previous guidance of a 2.0% rise for the period.
Next upped its full-year pretax profit guidance by £20 million, or 4.0% to £905 million compared to last year, saying £17 million of the lift comes from the sales beat to date and £3 million from an upgraded forecast for full price sales in January.
JD Sports plunged 20%, after cutting its profit outlook amid weaker-than-expected sales growth and gross margins.
The retailer said organic revenue was up 6.0% in the 22 weeks that ended December 30 on a constant currency basis from a year earlier, with like-for-like growth of 1.8%. This was slightly behind its expectations. The retailer expects organic revenue growth of around 8% for the year ending February 3.
As a result, it expects to report pretax profit and adjusted items of between £915 million and £935 million for the financial year. This falls short of market expectations of £1.04 billion, which back in September, JD Sports had said it expected to meet.
‘Our key markets have seen increased promotional activity during the peak trading season, driven by a more cautious consumer, but we continue to grow market share,’ said JD Sports Chief Executive Officer Regis Schultz.
‘We are confident in our strategy and we continue to invest in our supply chain, systems and stores, supported by our strong cash generation and healthy balance sheet.’
Oil majors BP and Shell rose 1.4% and 0.9% respectively, tracking improved oil performance. Brent oil was trading at $78.92 a barrel early Thursday, higher than $78.13 on Wednesday.
In the FTSE 250, Tritax EuroBox gained 2.0%.
The investor in Continental European logistics real estate said it agreed a new five-year lease with an unnamed Scandinavian photovoltaic company to let its 5,007 square metre unit at its 13,611 square metre two-unit development near Stockholm, Sweden.
The lease begins in March with a 100% consumer price inflation indexation. This will be reviewed annually and includes a further five-year extension option.
Tritax Eurobox said the rent has been agreed at 3% above the estimated rental value as of September and 20% above the underwrite level.
Among London’s small-caps, Topps Tiles lost 5.6%.
The retailer said sales in the 13 weeks ended December 30 were down 4.0% from a year earlier, with like-for-like sales down 7.1%.
It explained that trading in the first quarter reflected the ongoing challenges to discretionary consumer spending, particularly those impacting on businesses serving the repair, maintenance and improvement sector.
Topps Tiles expects its full-year profits to be weighted towards the second half, based on a number of factors including the timing of the holiday pay accrual, higher energy usage in the first half and general trading in the first half.
In the US on Wednesday, Wall Street ended lower, with the Dow Jones Industrial Average and the S&P 500 both down 0.8%, while the Nasdaq Composite was down 1.2%.
Federal Reserve officials late Wednesday concluded that interest rate cuts are likely in 2024, although they deemed it would be appropriate to maintain a restrictive stance ‘for some time,’ according to minutes of December’s meeting.
‘In discussing the policy outlook, participants viewed the policy rate as likely at or near its peak for this tightening cycle, though they noted that the actual policy path will depend on how the economy evolves,’ the minutes stated.
The minutes indicated increased optimism among participants about the path of inflation, noting ‘clear progress’. The committee expressed a willingness to cut the benchmark lending rate in 2024 should that trend continue, though the timing of such a move remained uncertain.
Asian markets largely tracked US stocks into the red, the Nikkei 225 index in Tokyo closed down 0.5%. In China, the Shanghai Composite closed down 0.4%, while the Hang Seng index in Hong Kong was marginally down. The S&P/ASX 200 in Sydney closed down 0.4%.
China’s services sector expanded at a faster pace at the end of 2023, according to the latest survey data. The Caixin services purchasing managers’ index rose to 52.9 points from 51.5 in November, climbing further above the 50-point no-change mark.
Japanese manufacturing continued to contract in December. The au Jibun Bank manufacturing PMI fell to 47.9 from 48.3 in November, indicating a worsening downturn.
Gold was quoted at $2,046.61 an ounce early Thursday, higher than $2,038.89 on Wednesday.
On AIM, Angle soared 38%, after it unveiled ‘breakthrough’ clinical results from DNA molecular analysis of cancer patient blood samples that ‘provide a unique insight into the progression of each patient’s cancer and how this may be treated’.
The medical diagnostics firm said the results ‘highlight the potential for the Parsortix system to identify key variants [of] DNA mutations missed by other approaches to help guide treatment decisions.’
Still to come on Thursday’s economic calendar, the services PMI for the UK will be released at 0930 GMT. Survey data will also be released for the EU and Germany shortly, followed by the US at 1445 GMT. Consumer price inflation data for Germany is released at 1300 GMT.
Two US jobs data releases also come out in the afternoon: the ADP jobs report at 1315 GMT and initial jobless claims at 1330 GMT.
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