LONDON MARKETS: FTSE 100 Aims For Fresh Record, But Tesco And M&S Hold Back Gains
11 Gennaio 2018 - 10:38AM
Dow Jones News
By Sara Sjolin, MarketWatch
Pound slides below $1.35, helping mining and tobacco stocks
U.K. stocks were heading for a fresh record on Thursday, led
higher by tobacco and mining companies boosted by a weaker pound
and a rise in metals prices.
Supermarkets, however, curbed gains for the London benchmark
after disappointing trading updates from retailers Tesco and Marks
& Spencer covering the crucial Christmas sales period.
What is the market doing: The FTSE 100 index added 0.2% to reach
7,760.64, on track to take out the record close of 7,748.51 set on
Wednesday.
The pound dropped to $1.3475, compared with $1.3508 late
Wednesday in New York. The pullback came as the dollar recovered
from jitters about whether China
(http://www.marketwatch.com/story/dollar-stumbles-losing-ground-to-rivals-across-the-board-2018-01-10)
will slow its purchases of U.S. government bonds.
What is driving the market: While other global markets have
taken a breather from their recent rally, the FTSE has continued to
keep a toehold in record-setting territory. On Thursday, the action
in London was focused on sectoral moves.
Miners helped lift the benchmark on Thursday, as copper prices
gained for a second straight day and inched closer to a four-year
high.
Heavyweight tobacco companies also lent a helping hand, getting
a boost from the drop in the pound. Tobacco companies generate the
majority of their sales outside the U.K., so weaker sterling lifts
their earnings when translated back into the U.K. currency.
Supermarket sweep: Shares of Marks & Spencer Group PLC
(MKS.LN) (MKS.LN) slid 3.4%, after the retailer and supermarket
chain said like-for-like total U.K. sales declined
(http://www.marketwatch.com/story/marks-spencer-food-sales-fall-at-christmas-2018-01-11)
1.4% in the 13 weeks to Christmas. Like-for-like food sales fell
0.4%, while clothing and home sales dropped 2.8%.
"There is no repackaging these figures as anything short of very
disappointing. Food is the worry -- it's been the easy win for
M&S for years but suffered a 0.4% like-for-like decline," said
Neil Wilson, senior market analyst at ETX Capital, in a note.
In the same vein, Tesco PLC (TSCO.LN) (TSCO.LN) lost 2.8%. The
company, Britain's largest supermarket chain, said it's confident
in its outlook for fiscal 2018 after like-for-like U.K. sales rose
1.9%
(http://www.marketwatch.com/story/tesco-sales-rise-at-christmas-2018-01-11)
during the Christmas period. However, the general merchandise
business and slower tobacco sales dragged on total performance,
leaving analysts overall disappointed.
"Looking at competitors such as Sainsbury and Morrison, both
have beaten their forecast for Christmas trading. This doesn't put
Tesco in a strong position at all," said Naeem Aslam, chief market
analyst at Think Markets, in a note.
Shares of J Sainsbury PLC (SBRY.LN) were down 0.6% on Thursday,
and Wm. Morrison Supermarkets PLC (MRW.LN) lost 0.7%.
Stock movers: Shares of British American Tobacco (BATS.LN)
(BATS.LN) rose 1.5% and Imperial Brands PLC (IMBBY) (IMBBY) added
0.8%.
Among miners, shares of Anglo American PLC rose 1.5% (AAL.LN) ,
while BHP Billiton PLC (BLT.LN) (BHP.AU) (BHP.AU) added 1.3%.
Shares of Barratt Developments PLC (BDEV.LN) slid 1.6% even
after the home builder said it had a strong performance in the
first half of fiscal 2018
(http://www.marketwatch.com/story/barratt-upbeat-after-1h-prices-forward-sales-rise-2018-01-11).
On an upbeat note, distribution and outsourcing company Bunzl
PLC (BZLFY) gained 1% after saying it is taking over U.S. workplace
safety company Revco as well as U.K. catering equipment business
Aggora Group. It also said it received a binding offer to sell its
OPM business in France.
(END) Dow Jones Newswires
January 11, 2018 04:23 ET (09:23 GMT)
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