Morning Market Commentary: FTSE hits fresh highs, Sainsbury’s raises full year profit guidance despite Argos growing pains
The FTSE continued to shuffle, rather than soar, to a fresh all-time high this Wednesday.
It started the session up around 15 points, putting a bit of distance between it and the 7730 mark it has struggled to really break beyond in the last couple of sessions. The FTSE was somewhat aided by a further dip from sterling, which slipped to a one-ish week low against the dollar while shedding 0.3% against the euro.
If it were to manage anything more explosive the FTSE really could have done with a blockbuster set of Christmas figures from Sainsbury's (LON:SBRY). Yet the most orange member of the Big Four didn’t produce the kind of report that, like Morrisons (LON:MRW) on Tuesday, lifted the sector as a whole, instead posting a 1.1% jump in like-for-like Q3 sales. That compares to the premium range and online sales-driven 2.8% increase at Morrisons, with the difference between the 2 firms coming down to Sainsbury’s ownership of Argos.
A 1.4% third quarter decline at the high street staple – which is growing cold in the shadow of Amazon (NASDAQ:AMZN) – countered the 2.3% rise in food sales, resulting in the slightly disappointing like-for-like figure. However, the numbers were good enough that Sainsbury’s raised its full year profit guidance, a move that sent the stock 1.5% higher to £2.50, its best price in 5 months.
It’s actually a pretty busy morning for UK data. The manufacturing production reading is set to rise from 0.1% to 0.3% month-on-month, while its industrial peer is forecast to jump from 0.0% to 0.4%. The danger for the FTSE is that these figures may help erase the pound’s early losses, something that would potentially pull the index back from its current highs.
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