FTSE 100 edges higher but off record peaks
Retailers carry the market lower
Pound rises 0.45% against US dollar to $1.2293
FTSE 100 stocks closed firmer on Wednesday but a grim outlook for 2017 from Next Plc left retailer shares in the bargain bucket.
The FTSE 100 ended up 0.2% at 7189 – just off its intraday record highs hit on Tuesday at 7,203.
Top gainers were housebuilding group Barratt Developments (LON:BDEV) up 4.1% to 483.9p and miner Fresnillo (LON:FRES) up 3.8% to 1314p.
But all the market talk was about Next Plc (LON:NXT) down 14.4% to 4085p. It said sales fell 0.4% in the run-up to Christmas and added full-year profits would be at the low end of forecasts.
Next also warned that 2017 would be "another challenging year", and predicted a fall in profits.
The news hit shares in other retailers, with Marks & Spencer (LON:MKS) the second-biggest faller, down 6.1% to 323.4p and followed by Primark owner Associated British Foods (LON:ABF) down 3.7% to 2610p.
Other retailers in the dumps including electronics group Dixons Carphone (LON:DC.) and Burberry (LON:BRBY).
The FTSE 250 midcaps barely rose, up 0.06% to 18,151 while the FTSE AIM 100 Index edged up 0.08% to 4102. But at least it scored a fresh record high intraday of 4,108.04.
The FTSE AIM All-Share Index was up 0.2% at 851.
A total of 36% of London stocks gained and 31% fell on Wednesday.
1530 GMT - FTSE 100 dull as US stocks start cautiously; Next warning hits retailers
FTSE 100 down 8 points at 7,169
Dow up a touch high as Fed minutes awaited
Retailers suffer as Next's record of under-promising comes to an end
Housebuilders wanted after DB note, strong construction PMI report
3.30pm … Treading water ….
The Footsie was modestly lower as US stocks also started the second session of 2017 in unexciting fashion, with the Dow Jones once again unable to make a move up towards the psychologically-important 20,000 level.
Late afternoon in London, after hitting fresh record highs yesterday, the FTSE 100 index drifted 8 points lower at 7,169, while the US blue chip index added just 12 points at 19,894 after around an hour of trading.
The New York market was subdued as investors awaited the release later of minutes from the Federal Reserve’s December meeting, where the US central bank raised interest rates for only the second time in around a decade.
The minutes could shed light on not simply the pace of interest-rate hikes, but also on how policy makers will respond to President-elect Donald Trump, who takes office on January 20.
Connor Campbell, financial analyst at Spreadex, said: “The elusive 20000 level remains in play, then, but with the sluggish Dow needing an injection of momentum if it is to hit that record high.
“That momentum may be found in this evening’s FOMC meeting minutes; investors will be looking for hints at the Fed’s potential schedule for the year ahead, with a few rate hikes already expected across 2017.”
1.00pm ... Clothes a drag ...
The dead weight of clothing retailers continues to slow the Footsie down.
The top-share index was barely changed at the end of the lunchtime trading session, which was a creditable performance considering fashion firm Next Plc (LON:NXT) was off 12% after a profits warning that also dragged sector peers Marks & Spencer Group PLC (LON:MKS) and Primark-owner Associated British Foods PLC (LON:ABF) down.
Marks shed 4.5% in sympathy with Next while AB Foods lost 3.8%.
READ: Next slumps as it cuts its profit guidance ...
“Despite hopes of a more positive Christmas for the retailers, Next’s results have set the tone for what is likely to be a difficult reporting season. Group sales are down even against a weak Christmas period last year,” noted George Salmon, an equity analyst at Hargreaves Lansdown.
House builders were doing their bit to shore up the Footsie, as Deutsche Bank issued a note on the sector ahead of a trading update tomorrow from Persimmon PLC (LON:PSN).
Barratt Developments PLC (LON:BDEV) was top dog, rising 3.3% to 480p, as Deutsche (DB) lifted its price target from 575p to 706p.
Taylor Wimpey PLC (LON:TW.) advanced 2.4% to 159.2p as DB bumped up its price target to 239p from 218p.
8.30am ... Next goes from riches to rags
The FTSE 100 got off to a sluggish start early on with Next's (LON:NXT) profit warning putting the brakes on progress.
At 8.30am, the index of blue-chip shares was off just over a point at 7,176.72 having been called higher ahead of the open by the spread betting firms.
Top of the fallers was Next, which dropped 10% after it cut earnings guidance and warned on the outlook for the business.
Its troubles helped wipe hundreds of millions of pounds off the value of sector with Marks & Spencer (LON:MKS) and Primark owner Associated British Foods (LON:ABF) off 4.8% and 4.2% respectively.
The first update from the sector after the break will possibly have strengthen the resolve of those hedge funds betting on a poor festive season for Britain's leading shopkeepers.
Ocado (LON:OCDO), Wm Morrisons Supermarkets(LON:MRW), J Sainsbury (LON:SBRY) and Debenhams (LON:DEB) are among the market's most shorted stocks.
Elswhere, the builders and banks topped the Footsie leader board early on.
Delving down through the small-caps, gas storage specialist InfraStrata tumbled 20% after it updated on financing negotiations with the company's financial future still far from certain.
6.45am ... FTSE 100 expected to advance
In the last year business, currently valued at less than £1mln, has lost 61% of its market worth.
FTSE 100 is called to continue its good run after the index finished at a new record high on Tuesday - the first session of 2017.
It comes after stocks rose in Asia overnight after positive economic data from Japan and gains were made on Wall Street.
FTSE 100 closed yesterday up 0.49% at 7,177 after being boosted by bullish US factory data, 18-month high oil prices and Chinese data.
Today, financial spreadbetters at IG Index are calling the UK benchmark to open a further 15 points higher.
On Wall Street, the Dow Jones finished 0.60% higher at 19,881, while the broader based S&P500 closed 0.85% ahead, at 2,257 and the Nasdaq also finished 0.85% higher.
The Nikkei 225 is up 2.51% at the time of writing as the US dollar surged overnight, spelling good news for exporters. In addition, Japanese manufacturing data showed a rise in December, indicating signs of recovery and increased demand.
In China, the Shanghai Composite Index is up 0.73% to stand at 3,158.
Today, attention will turn towards the UK retail sector as the first glimpse of festive trading will be unveiled via company updates.
High street fashion favourite Next Plc (LON:NEXT) and home improvements products retailer Topps Tiles (LON:TT) will be first out of the stalls.
Yesterday, in a non-food retail sector review, analysts at HSBC said that while high street sales are set to disappoint, with footfall down 7.3% year-on-year on Boxing Day following around 6% declines on December 23 and 24, online trading should continue to grow.
The HSBC analysts said they think that, while Next’s Christmas sales should be better on weak comparatives, higher temperatures in December and a switch in focus to leisure and Christmas gifts will have done little for wider apparel sales, which are already under pressure
Markets
Gold is up 0.10% to US$1,163 an ounce
Brent crude down 0.725 to US$56.30 a barrel
UK pound is worth US$1.2255.
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