FTSE 100 rallies into Easter break, JD Sports jumps

The FTSE 100 was on the front foot going into the Easter weekend as a boost to the commodities sector helped the index ever closer to record highs above 8,000.

Confirmation that the UK entered a recession in Q4 2023 did little to dampen traders’ enthusiasm for UK stocks as the FTSE 100 traded higher by 0.26% at 7,952. The index had hit 7,973 earlier in the session.

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Susannah Streeter, head of money and markets at Hargreaves Lansdown, explained that while the economy contracted, key economic indicators were robust: “the ONS snapshot also shows that savings remained relatively high and real household disposable incomes increased in the last quarter of the year, adding to hopes that consumers resilience has been rising and that the recession will have been a super-short one.”

London’s leading index is often little moved by UK-centric economic developments and is more easily led by China, as was the case on Thursday. A strong session in China overnight helped drive early gains in London, particularly in those stocks with exposure to the world’s second-largest economy.

“The FTSE 100 was higher ahead of the Easter weekend, lifted by strength in the resources sector as Chinese markets rallied,” said AJ Bell investment director Russ Mould.

The mining sector was the main driving force behind the gains, but JD Sports was the standout riser, jumping 10% after signalling that the profits warning issued earlier this year has been contained. 

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JD Sports has been a powerhouse in the sportswear retailing space, but the stock wobbled earlier this year when it revised down profit targets. However, today’s full year results announcement will go along way to dispelling fears about its growth trajectory. 

“Amid cracks in the athleisure and footwear sector, JD Sports has managed to outperform the market and is upbeat about prospects for the year ahead. That’s quite a different message from other key players in the sector such as Lululemon and Nike which both disappointed with their latest updates as consumers rein in spending and competition heats up,” Russ Mould said.

“JD Sports isn’t completely immune. The marketplace is awash with discounting and a lack of new products to excite shoppers. Interest rates remain high and consumer spending habits are unlikely to show a drastic improvement until we’ve seen several rate cuts by central banks. However, JD continues to open new stores which might help it grow sales at a faster rate than the average peer.”

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