Supermarket sweep pushes FTSE to seventh rise in a row
BRITAIN’S top share index rose for a seventh-straight day yesterday, boosted by supermarkets after a trading update from Wm Morrison, and after strong US quarterly results, with miners also lending support.
The FTSE 100 closed 37.55 points higher, or 0.9 per cent, at 4,481.17, following a gain of 1.3 per cent on Monday.
The index was given a lift by upbeat US quarterly results from bellwether companies including Caterpillar, which overshadowed Federal Reserve chairman Ben Bernanke’s cautious outlook for the economy.
“I think as much as anything there’s a bit of a momentum effect, which has given our markets a bit of a push,” said Richard Hunter, who is head of UK equities at Hargreaves Lansdown.
“Certainly in terms of Next and Morrisons, it seems that the UK consumers are continuing, against some expectations, to be very resilient,” he said.
Wm Morrison grabbed the top spot on the blue-chip leaderboard, up 8.2 per cent after Britain’s fourth largest supermarket group said it expected full-year results to be ahead of expectations.
Peers Tesco and Sainsbury climbed 1.4 per cent and 3.1 per cent respectively.
Next also gave out encouraging signals, with the fashion retailer raising its profit guidance after clothing sales were boosted by good summer weather.
The firm’s shares, however, fell back 1.6 per cent, as investors booked profits after a strong run in the share price.
Miners added the most points to the index, with copper hitting nine-month highs earlier in the session as analysts said the metal looked strong fundamentally.
Xstrata, Antofagasta, Rio Tinto, Anglo American and BHP Billiton all added between 2.3 and 4.1 per cent.
Energy stocks were also in demand, with BP, Royal Dutch Shell and Cairn Energy up between 0.4 and 1.9 per cent.
Defensives were firmer. Ahead of its second-quarter results today, GlaxoSmithKline put on 1.7 per cent, while British American Tobacco added 1.4 per cent.
Banks were the biggest drag on the blue chips, with index heavyweight HSBC dropping 1.6 per cent amid concern a recent rally was overdone as the outlook remains fragile.
HSBC declined to comment on its share move.
Barclays fell 1.2 per cent, but gains were seen elsewhere in the sector, with part state-owned banks Lloyds Banking Group, Royal Bank of Scotland and global lender Standard Chartered adding 0.1-2 per cent.
Friends Provident was among the heaviest fallers of the day, off 2.5 per cent after it rejected a revised offer from Resolution, saying that the financial buyout firm’s structure was “totally inappropriate” for a public company.