After a rather negative start to the year the FTSE was in a slightly better mood this Wednesday, with its retailers receiving a late Christmas present from Next.
The FTSE suffered a rather miserly reality check on Tuesday, falling back below 7650 having teased a record all-time high in the pre-market. And though it is currently lacks the momentum to reach such heights this morning, it has gotten off to a gently positive open despite sterling’s own beefed up performance. Against the euro, the pound has risen 0.1% to tickle a 2 week peak of €1.13, while cable is holding above $1.359, its best price since mid-September, after Tuesday’s New Year’s celebrations.
That the FTSE isn’t in the red is largely thanks to Next (LON:NXT). For the 54 days to Christmas Eve the high street staple revealed a healthy 1.5% rise in sales, light years away from both the company’s own 0.3% decline forecast back in November and the 0.5% drop expected by analysts. Not that this figure doesn’t carry a few caveats: 1.1% of the growth came from new stores, while its Retail division remained in the doghouse, with an admittedly improved 6.1% fall in sales looking all the worse next to 13.6% surge seen in the Directory business.
Still, there was enough good news for Next to lift its full year pre-tax profit guidance to a new range of between £718 million to £732 million, causing the stock to rocket 9.5% to a £49-crossing 2 month high. This festive cheer spread across the rest of the retail sector, with M&S (LON:MKS) – which updates next week – up 3.9% and Primark-owner Associated British Foods (LON:ABF) rising 2.7%.
Beyond the day’s retail focus, investors’ attentions will be on the latest UK construction PMI. The figure is forecast to rise from 53.1 to 53.2; if accurate that’d be a 6 month peak for the construction sector, and a continuation of the solid manufacturing PMI released on Tuesday.
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