LONDON MARKETS: FTSE 100 Logs 5th Straight Record Close After Late-session Jump
January 04 2017 - 12:23PM
Dow Jones News
By Sara Sjolin, MarketWatch
However, Next's warning weighs on retailers
U.K. stocks staged a late-session surge and erased earlier
losses to finish at a record, supported by a rise in home-builder
and bank shares.
The FTSE 100 index rose 0.2% to finish at 7,189.74, marking an
all-time closing high for a fifth straight session.
The index had traded lower for most of the day, with shares of
Next (NXT.LN) dropping 14% after the company warned on a
challenging 2017
(http://www.marketwatch.com/story/next-warns-on-challenging-2017-as-brexit-kicks-in-2017-01-04)
as the fallout from the U.K.'s Brexit vote starts to weigh on
equities. The stock also fell on Tuesday after Deutsche Bank
downgraded the stock to a hold from buy.
The announcement weighed on other U.K. retailers, with shares of
Marks & Spencer Group PLC (MKS.LN)(MKS.LN) down 6.1% and
Debenhams PLC (DEB.LN) 6.6% lower.
"Both of these face similar problems to Next--cost pressures and
a failure to stay fresh in the eyes of consumers. Investors are
clearly wary about high street dinosaurs as we head into an
uncertain 2017, with Brexit, inflation and a weak pound all a major
concern," said Neil Wilson, senior market analyst at ETX Capital,
in a note.
Among other retailers, Primark-parent Associated British Foods
PLC (ABF.LN) (ABF.LN) fell 3.7% and Burberry PLC (BRBY.LN)
(BRBY.LN) dropped 2.1%.
Banks, however, rose and helped to push the FTSE into positive
territory as they tracked gains for their European counterparts
(http://www.marketwatch.com/story/european-stocks-flutter-around-1-year-high-as-banks-push-higher-2017-01-04)
after Barclays struck an upbeat tone on Credit Suisse Group AG
(CSGN.EB) (CSGN.EB).
Shares of Royal Bank of Scotland Group PLC (RBS.LN) (RBS.LN)
rose 1.5%, Barclays PLC (BCS) (BCS) added 1.3% and Standard
Chartered PLC (STAN.LN) advanced 0.8%.
Housebuilders were also rising after encouraging data on the
industry. The construction purchasing managers index for December
rose to 54.2, its highest fastest pace of expansion since March
2016.
Additionally, mortgage approvals for November rose to an
eight-month high of 67,505.
"A sustained uptick in mortgage approval rates could provide
support to house prices and house-builder share prices, given that
the latter remain depressed relative to where they were earlier in
the year," said Russ Mould, investment director at AJ Bell, in a
note.
Shares of Barratt Developments PLC (BDEV.LN) jumped 4.1% and
Taylor Wimpey (TW.LN) climbed 3.8%.
(END) Dow Jones Newswires
January 04, 2017 12:08 ET (17:08 GMT)
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