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FTSE hits new high despite Tesco and M&S Christmas slumps

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01/11/2018 | 06:34 pm
MILAN/LONDON (Reuters) - Underwhelming Christmas updates at retailers Tesco and Marks and Spencer weighed on the UK's top share index on Thursday but failed to prevent it from hitting a new high, with strong metal and oil prices supporting mining and energy stocks.

The FTSE 100 <.FTSE> benchmark closed up 0.2 percent at 7,762.94 points.

Marks and Spencer (>> Marks and Spencer Group Plc) shares sank 7 percent, the biggest loss on the FTSE, after sales fell in the last quarter of 2017, hampering the British retailer's latest attempt at a corporate turnaround..

Tesco (>> Tesco PLC) fell 4.5 percent as the country's biggest retailer missed forecasts for Christmas trading as lower demand for general goods offset strong sales of fresh food.

Sainsbury's (>> J Sainsbury plc), Britain's second-largest supermarket, and fourth-ranked Morrisons (>> WM Morrison Supermarkets PLC) both beat forecasts for Christmas trading but fell 2.1 percent and 1.4 percent respectively.

Mid-cap retailer Card Factory (>> Card Factory PLC) slumped 20 percent, also on the back of its Christmas update.

"Thursday's batch of updates does not alleviate renewed investor concerns that the retail sector could relapse into the malaise of a few years back", Ken Odeluga, a market analyst at City Index commented.

British builder Barratt (>> Barratt Developments Plc) fell 2.7 percent, after it posted a flat sales rate in the last six months of 2017 while Taylor Wimpey (>> Taylor Wimpey plc) edged down 1.8 percent, continuing a slide from the previous session, when it said full-year results for 2017 would be in line with expectations.

Lifting the broader index, stronger metal prices pushed up big mining companies, including Anglo American (>> Anglo American), Rio Tinto (>> Rio Tinto) and BHP Billiton (>> BHP Billiton Plc). Their shares rose 3.6 percent, 1.9 percent and 1.8 percent respectively.

Among the gainers, Just Eat (>> Just Eat PLC) led with a rise of 4.7 percent, underpinned by a Barclays upgrade to "overweight" on expectations of strong revenue momentum in the fourth quarter and the year 2018.

Oil prices, surging to their highest since 2014, also helped BP (>> BP plc) and Royal Dutch Shell <RDSa.L> add a few points to the index with rises of 0.5 percent.

(Additional reporting by Julien Ponthus Editing by Larry King and Hugh Lawson)

By Danilo Masoni and Julien Ponthus

Reuters 2018
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