Retailers rose to the top of the FTSE 100 today (3 January) following a decent showing from high street chain Next, but it wasn’t enough to lift London’s top flight out of the red.
The blue-chip index closed the day down 41.57 points, or 0.62%, at 6,692.66, following US markets lower.
Wall Street traders are reeling after tech giant Apple cut its holiday sales forecasts amid lower iPhone sales and pressures in China, sparking a sell-off in global markets.
Defying the trend on London’s premier index were the likes of Tesco, Associated British Foods (Primark’s parent), Morrisons and Marks & Spencer, which were riding high off the back of Next’s Christmas trading update.
The high street chain cut its annual profit forecast and predicted falling earnings over the year ahead, but revealed a solid Christmas performance.
Fiona Cincotta, senior market analyst at City Index, said: “Investors have chosen to look on the brighter side of some not quite as dismal as expected results.
“The profit downgrade being less than investors were expecting, plus sales in the weeks leading into Christmas making up for a stinking November, gave investors reason to cheer.”
The group said full-price sales rose 1.5% between 28 October and 29 December, in line with expectations.
It saw high street store sales slump -9.2% over the Christmas trading period, though this was offset by a +15.2% surge online.
It downgraded its profit forecast to £723m for the year to January, from the £727m previously expected, and said the next financial year will remain under pressure.
The pound, meanwhile, was flat against the US dollar at 1.261 at the London market close. Versus the euro, sterling shed 0.5% to sit at 1.106.
Cincotta said that currency traders are waiting for the next instalment of the Brexit saga before making their next move.
“She (Theresa May) is seeking to get legally binding assurances on the issue of the Irish border ahead of another Brexit vote in Parliament next week, which, if unsuccessful, may lead to the postponing of the Brexit deadline from March to late June.
“The currency markets are chewing on all the possible outcomes but as they are not back to full volume of trade yet the pound reacted with slight declines against both the dollar and the euro.”
The biggest risers on the FTSE 100 were Next up 173p at 4,350p, Tesco up 7.8p at 19.35p, Morrisons up 4.75p at 216.55 and Astrazeneca up 107p at 6,010p.
The biggest fallers on the FTSE 100 were Evraz down 37.1p at 442.1p, Burberry down 102p at 1,623.5p (the luxury brand took a hit on the back of Apple’s new amid fears that Chinese consumers are pulling back on luxury goods), Glencore down 13.45p at 269.05p and Sage Group down 27.2p at 572.2p.
Words and image: Press Association