FTSE soars to a five-year high on back of US hopes

THE FTSE 100 hit its highest level for nearly five years in a flying start to 2023.

On a fourth day of gains since trading resumed after the New Year break, London’s blue chip index rose 0.9pc, or 66.04 points, to 7699.49. That is the highest level since August 2018.

The rally was mirrored in the more domestically- focused FTSE 250, which added 0.2pc, or 41.29 points, to 19504.72.

Both benchmarks have made four days of gains since trading resumed after New Year.

AJ Bell investment director Russ Mould said: ‘As New Year starts go, 2023 is looking sprightly for the FTSE 100 with the index having risen every session so far.

‘Small steps forward are a winner given the difficult backdrop.’ Sentiment was boosted by fresh economic data from the US.

American employers hired another 223,000 new roles while the unemployment rate fell to 3.5pc from 3.6pc.

But perhaps of great significance for investors was weaker wage growth which could – eventually – persuade the US Federal Reserve to slow down the pace of interest rate rises.

Shares in shipping group Clarkson rose after it reported an upbeat end to the year.

The FTSE 250 firm singled out its broking division, which links ship owners with clients seeking to chart vessels, as it hailed ‘strong trading’ throughout the fourth quarter of 2022.

The group said it expects profits for the full year to be ‘ahead of current market expectations’ at ‘not less than £98m’.

That would be well ahead of the £69.4m generated in 2021 and forecasts by analysts at Peel Hunt of £83.6m. Shares in the company, which has 52 offices across 23 countries, rose 5.1pc, or 160p, to 3305p. However, Peel Hunt warned that Clarkson faces a tougher spell this year due to the weakness in the dry bulk market.

Mike Ashley’s Frasers Group lowered its stake in Hugo Boss to 3.9pc only two months after increasing its holding to 4.3pc. It controls a further 25pc of Hugo Boss through derivatives.

The fashion empire, which owns Sports Direct, Jack Wills and Flannels, said its maximum exposure in the luxury German designer brand is around £580m, down from £840m. Frasers shares fell 0.4pc, or 3p, to 758p.

Pest control firm Rentokil Initial fell 3.7pc, or 19p, to 501.4p after City broker BNP Paribas initiated its coverage with an ‘ underperform’ rating.

Essentra, the mid-cap components business, tumbled 6.8pc, or 16p, to 218p following a tough end to 2022.

The group said sales for the final three months of last year were 3pc lower than the same period in 2021. That meant revenues for 2022 were likely to have increased by 6.5pc.

But analysts at Jefferies warned the downturn seen towards the end of last year is expected to continue through to the end of 2023.

Topps Tiles accused one of its biggest investors of misleading other shareholders in a battle for the board. MS Galleon owns close to 30pc of the tile retailer and has called for the departure of Darren Shapland, the company’s chairman, and the appointment of two others to the board.

But Topps said MS shared information with shareholders ‘which contradicts previous statements made directly to Topps’. There will be a vote on January 18. Shares were flat at 48p.

Curtis Banks Group agreed takeover terms with digital investment platform provider Nucleus.

The offer of 350p a share values the self-invested personal pension provider at around £242m.

Shares in Curtis Banks rose 2.7pc, or 9p, to 342p.