FTSE index gains as retail stocks rally
Reuters
Published May 28, 2015 12:37
FTSE index gains as retail stocks rally
By Atul Prakash
LONDON (Reuters) - Britain's top share index edged higher on Thursday, led by retailers after Sports Direct (LONDON:SPD) raised its full-year earnings and profit outlook and Kingfisher (LONDON:KGF) reported a rise in retail profit.
Britain's biggest sporting goods retailer Sports Direct rose 4.6 percent, the top gainer in the FTSE 100 index, after raising its outlook, citing lower interest charges and what it described as a prudent depreciation policy.
Europe's biggest home retail company Kingfisher followed, up 3.3 percent after reporting a rise in first-quarter retail profit, helped by a strong performance at Screwfix which lifted sales at the group's British arm.
"UK wage growth has started to pick up and shopping has been boosted by low inflation. Consumers now have more money in their pockets to spend on general merchandise," said Edmund Shing, global equity fund manager at BCS Asset Management.
Adding to the bullish picture, British consumer confidence surged this month to its highest level in a year as more households expected their finances to improve in the coming 12 months, a survey showed on Thursday.
The FTSE 100 index was up 0.2 percent at 7,046.37 points by 1050 GMT. Gains were capped by weaker miners, which fell 0.4 percent.
The sector is down 9 percent since May 5 as copper prices have dropped to a four-week low. Investment bank Goldman Sachs said overnight that major iron ore miners were unlikely to create a cartel and agree on output cuts to shore up prices.
"Goldman Sachs said that they don't see a cartel in the sector ... so in the grand scheme of things, metal prices are weak, (and) without a cartel look set to remain weak," said David Madden, market analyst at IG.
"Demand for the underlying minerals looks weak, and the supply side looks set to keep the pressure up on these stocks as well."
Product-testing firm Intertek Group (LONDON:ITRK) was the blue-chip index's top loser, falling 1.5 percent to 2,538 pence, after Deutsche Bank (XETRA:DBKGn) cut its stance to "hold" from "buy" and lowered its price target to 2,654 pence from 2,725 pence.
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Written By: Reuters
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