LONDON MARKETS: FTSE 100 Captures Fresh Record, But Tesco And Marks & Spencer Stocks Falter
11 Gennaio 2018 - 6:58PM
Dow Jones News
By Sara Sjolin and Carla Mozee, MarketWatch
Mining and tobacco stocks advance
U.K. stocks logged a fresh record close on Thursday, with
tobacco and mining companies boosted by a weaker pound during the
session and a rise in metals prices.
Supermarkets, however, limited gains for the London benchmark
after disappointing trading updates from retailers Tesco and Marks
& Spencer covering the crucial Christmas sales period.
How markets performed
The FTSE 100 index added 0.2% end at 7,762.94, taking out the
record close of 7,748.51 set on Wednesday.
The pound bought $1.3540 after trading as low as $1.3458.
What drove markets
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 during the day. 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.
But the pound was eventually pushed back above $1.35, "lifted in
the wake of the ECB minutes -- as the U.S. dollar sold-off," after
minutes of the ECB's December meeting suggested
(http://www.marketwatch.com/story/ecb-may-tweak-policy-guidance-on-strong-economy-2018-01-11)
it may take a more hawkish stance on monetary policy in 2018, CMC
Markets noted.
Supermarket sweep
Shares of Marks & Spencer Group PLC (MKS.LN) (MKS.LN) slid
7%, 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 4.5%. 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 fell 2.1% on Thursday,
and Wm. Morrison Supermarkets PLC (MRW.LN) lost 1.4%.
Stock movers
Shares of British American Tobacco (BATS.LN) (BATS.LN) rose 1.7%
and Imperial Brands PLC (IMBBY) (IMBBY) added 1.4%.
Among miners, shares of Anglo American PLC surged 3.5% (AAL.LN)
, while BHP Billiton PLC (BLT.LN) (BHP.AU) (BHP.AU) added 1.8%.
Shares of Barratt Developments PLC (BDEV.LN) was pushed down
2.7% 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 2.2% 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 12:43 ET (17:43 GMT)
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