FTSE 100 buoyed by Primark and softer pound
The pound lost ground during the session as wage data missed analysts’ forecasts.
The FTSE 100 was buoyed by a combination of solid retail results and a softer pound following weaker-than-expected wage data on Tuesday.
London’s blue chip index closed the day 0.39%, or 27.85 points, higher at 7,226.1.
Primark owner Associated British Foods (ABF) led the charge, rising by more than 4% as it shrugged off the gloom surrounding the retail sector.
UK sales at Primark were up 3% on a like-for-like basis in the six months to March 3. ABF said this performance was “remarkable” amid difficult conditions, and reassured investors that profit growth would ramp up in the second half. Shares climbed 107p in the session, closing at 2,690p.
In morning trading, the pound hit its highest level against the dollar the since the Brexit vote, rising 0.2% to 1.435.
However, sterling lost ground after data showed average earnings increased 2.8% in the three months to February – whereas analysts had expected earnings to rise 3%.
In the afternoon, the pound was down 0.3% against the dollar at 1.430. Against the euro, sterling was flat at 1.157.
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David Madden, market analyst at CMC Markets, said: “Sterling has gained ground versus the US dollar in the previous seven sessions, so a bit of profit-taking is to be expected.
“The solid figures from the UK today will keep the hawks happy, as there is speculation the Bank of England will increase interest rates next month.”
Brent crude was down 1.6% to 71.27 dollars per barrel.
In UK markets, AA shares jumped 17% or 19.8p to 133.55p despite trading profit falling while the company battles its former chairman in the courts.
The AA said it is fighting a £225 million claim from its former boss Bob Mackenzie, who was sacked last year for gross misconduct.
Mr Mackenzie, former executive chairman of the AA, filed a claim against the company and a number of its directors in the High Court on March 6.
The AA said on Tuesday it will incur costs of £1 million over the next two financial years as it fights the claim, but that it hopes to recoup the costs from Mr Mackenzie when the case closes.
Traders also took a shine to JD Sports, which reported a 24% rise in pre-tax profits to £294.5 million for the year to February 3. Shares jumped as much as 8% higher at one stage, and ended the day up 5.2% or 18.4p at 371.3p.
WPP’s share price extended losses following a sell-off on Monday, falling by 0.63% or 7p to 1,104p by the end of the session. The advertising giant suffered another blow after Moody’s downgraded its outlook for the group from stable to negative following the shock departure of boss Sir Martin Sorrell.
Lloyds Banking Group said more than 1,200 jobs are being axed under plans to shut another 49 branches in a further blow to Britain’s high streets. The banking giant’s share price was flat at 67.66p at the close.
Johnston Press, owner of the Scotsman and the Yorkshire Post, managed to narrow its pre-tax losses to £95 million from £300.7 million for the year December 30.
Group revenues fell from £222.7 million to £201.6 million, dragged down by an 18.3% fall in total advertising sales to £100.2 million. Shares closed the down 0.11% at 8.86p.
The biggest risers on the FTSE 100 were Evraz, up 24.1p to 389.3p, Medicinic International, up 32.2p to 624.8p, GKN, up 19.3p to 469.6p, and ABF, up 107p to 2,690p.
The biggest fallers on the FTSE 100 were Reckitt Benckiser, down 191p to 5,806p, Rolls Royce, down 17.2p to 860.6p, British American Tobacco, down 77.5p to 3,965.5p, and Rentokil, down 3.7p to 268.2p.