Footsie clocks up best week in four months

THE FTSE 100 clocked up its best week in four months as luxury and alcohol stocks soared amid signs consumers are still splashing out on high-end goods.

On an upbeat day for investors, the blue-chip index rose 1.4pc, or 105.36 points, to 7635.09.

The FTSE 250, meanwhile, gained 0.6pc, or 114.92 points, to 19338.02.

That took the FTSE 100’s gains this week to more than 2.3pc – its best performance since mid-September.

Yesterday’s rally was driven by luxury and alcohol stocks after a handful of reassuring updates provided some much-needed respite for two sectors that have come under pressure as shoppers cut back on expensive purchases.

Barclays upgraded the European luxury sector after the LVMH on Thursday reported record sales and profits last year following a strong final quarter.

The feel-good factor surrounding the French giant swept over London-listed firms, with Burberry surging 4.9pc, or 63p, to 1341.5p. And drinks giant Diageo gained 5.1pc, or 139p, to 2849p after Cognac maker Remy posted upbeat results.

Russ Mould, investment director at AJ Bell, said: ‘It seems the sector could go through a phase where investors are rewarding companies that say things are not as bad as feared, rather than saying everything is going well.’

But not everyone was so bullish. Analysts at JP Morgan said the positive sentiment surrounding UK retailers is likely to change in the next two to three months.

The bank downgraded its ratings on Tesco and Sainsbury’s, Britain’s two biggest supermarkets, as it expects them and others to see a slowdown in line with fellow grocers in the US and Europe. Shares in Tesco fell 1.8pc, or 5.3p, to 293.5p and Sainsbury’s lost 1.9pc, or 5.4p, to 276p.

There was also a downgrade for Tullow Oil as analysts at Stifel warned the West-African energy company’s debts will affect production. Shares slumped 6pc, or 2.08p, to 32.42p.

First Group, the transport group behind Avanti West Coast and Great Western Railways (GWR), moved to expand its footprint over North Yorkshire with the purchase of coach and bus operator York Pullman. But shares slid 0.1pc, or 0.2p, to 169p.

Another business to make gains was home improvement company Wickes after it said it expects profits for 2023 to have been at the top end of forecasts. Shares rose 8.4pc, or 12.1p, to 157p.

Following its best-ever summer, business is still booming for On the Beach. The value of the holidays booked in its peak period up to January 24 were 27pc higher than a year earlier. But shares slid 2.2pc, or 3.6p, to 160.4p. Premier Inn owner Whitbread traded higher after it extended its £300m share buyback programme by three months. The stock rose 1.3pc, or 45p, to 3646p.

There was also good news for investors in digital advertising agency S4 Capital after it outlined plans for a £2.7m share buyback just days after it reported a 4pc fall in revenues for 2023. Shares shot up 6.1pc, or 2.48p, to 42.94p.

Even a profit warning did not stop car dealer Motorpoint from announcing plans to buy back £5m worth of stock from investors.

The firm expects profits for the year to March 31 to be up to £6m below forecasts after a tough third quarter. Alongside the share buyback plans, Motorpoint remained upbeat over its plans to cut costs and expectation that the used car market will bounce back. Shares added 0.7pc, or 0.7p, to 98.7p.

Lender Paragon Bank made a positive start to its financial year and reiterated its annual forecasts. But shares slid 1.5pc, or 11p, to 712p.