FTSE-100 buoyed by Primark and softer pound

LONDON

THE FTSE-100 was buoyed by a combination of solid retail results and a softer pound following weaker-than-expected wage data yesterday.

London’s blue chip index closed the day 0.39 per cent, or 27.85 points, higher at 7,226.1.

Primark owner Associated British Foods (ABF) led the charge, rising by more than 4% as it shrugged off the gloom surrounding the retail sector.

UK sales at Primark were up 3% on a like-for-like basis in the six months to March 3. ABF said this performance was “remarkable” amid difficult conditions, and reassured investors that profit growth would ramp up in the second half. Shares climbed 107p in the session, closing at 2,690p.

In morning trading, the pound hit its highest level against the dollar the since the Brexit vote, rising 0.2% to 1.435.

However, sterling lost ground after data showed average earnings increased 2.8% in the three months to February – whereas analysts had expected earnings to rise 3%.

In the afternoon, the pound was down 0.3% against the dollar at 1.430. Against the euro, sterling was flat at 1.157.

David Madden, market analyst at CMC Markets, said: “Sterling has gained ground versus the US dollar in the previous seven sessions, so a bit of profit-taking is to be expected.

“The solid figures from the UK today will keep the hawks happy, as there is speculation the Bank of England will increase interest rates next month.”

Brent crude was down 1.6% to 71.27 dollars per barrel.

In UK markets, AA shares jumped 17% or 19.8p to 133.55p despite trading profit falling while the company battles its former chairman in the courts.

Traders also took a shine to JD Sports, which reported a 24% rise in pre-tax profits to £294.5m for the year to February 3. Shares jumped as much as 8% higher at one stage, and ended the day up 5.2% or 18.4p at 371.3p.

WPP’S share price extended losses following a sell-off on Monday, falling by 0.63% or 7p to 1,104p by the end of the session. The advertising giant suffered another blow after Moody’s downgraded its outlook for the group from stable to negative following the shock departure of boss Sir Martin Sorrell.

Lloyds Banking Group said more than 1,200 jobs are being axed under plans to shut another 49 branches in a further blow to Britain’s high streets. The banking giant’s share price was flat at 67.66p at the close.

Johnston Press, owner of The Scotsman and Yorkshire Post, managed to narrow its pre-tax losses to £95m from £300.7m for the year December 30. Shares closed down 0.11% at 8.86p.

The biggest risers on the FTSE-100 were Evraz, up 24.1p to 389.3p, Medicinic International, up 32.2p to 624.8p, GKN, up 19.3p to 469.6p, and ABF, up 107p to 2,690p.

The biggest fallers were Reckitt Benckiser, down 191p to 5,806p, Rolls-royce, down 17.2p to 860.6p, British American Tobacco, down 77.5p to 3,965.5p, and Rentokil, down 3.7p to 268.2p.

NEW YORK

US stock indexes rallied yesterday on broad-based gains while Netflix and Unitedhealth earnings impressed investors and boosted optimism about the corporate reporting season.

Shares in Netflix, the first of Wall Street’s leading momentum stocks to report earnings, rose nine per cent to close at a record high after the video-streaming pioneer smashed analysts’ quarterly subscriber estimates.

Amazon.com was the S&P’S biggest boost with a 4% jump, helped by Netflix results but also by signs the Supreme Court is hesitant to let states force out-of-state online retailers to collect sales taxes on purchases.

Analysts expect S&P 500 company profits to rise 18.6% in the first quarter, the biggest increase in seven years.

Strategists said strong earnings expectations as well as economic data from earlier in the day boosted equities.

“The overall picture is a positive one when it comes to earnings across sectors. There’s a nice little turbo boost being given by the tax reform legislation,” said Kristina Hooper, chief global market strategist at Invesco, in New York.

“It’s easier for markets to focus on that which is positive rather than try to assess the potentials of protectionism.”

The Dow Jones Industrial Average rose 213.59 points to 24,786.63, the S&P 500 gained 28.55 point to 2,706.39 and the Nasdaq Composite added 124.81 points to 7,281.10.