Next was the FTSE 100’s top riser on Thursday after the retailer impressed investors with a robust set of festive trading figures and ignited a rally in the UK’s listed retail companies.
Next shares were 7% higher at the time of writing and the FTSE 100 was gaining 0.4% to 7,618.
The festive trading period is key for retailers and Next is seen as a bellwether for the UK high street. The health of the consumer has been a major concern but today’s results from Next suggest shoppers are still in a position to spend, despite rising inflation and interest rates.
Ocado, Frasers Group and JD Sports all gained substantially on hopes they would also reveal similarly upbeat results to Next.
Greggs and B&M European Value also reported resilient numbers today. However, analysts cautioned that the location of these companies’ outlets may have favoured travel conditions and their sales may not be evident in retailer with a city centre focus.
“Next, B&M and Greggs are united by having a presence on retail parks where business has been better than expected in general. Widespread train strikes will have prevented a lot of people from going to city centre shops, which means retail parks with their plentiful parking spaces have been the preferred alternative shopping destination,” said AJ Bell investment director Russ Mould.
JD Sports are set to release their Christmas trading statement 11th January and Ocado 17th January.
China strength
The miners were once again higher after a strong session in Asia overnight.
“Asian stocks have fared well over night with Chinese indices doing particularly well with the Shanghai composite up 1.8%. Hong Kong’s Hang Seng was up 0.9% as news emerged that the border with China is soon to open. The Hang Seng is now at its highest level since the end of October 2022,” said Derren Nathan, Head of Equity Research, Hargreaves Lansdown.
Pearson was the FTSE 100’s biggest loser after the education material provider was cut to underperform with a price target of 865p. Pearson shares were down 4.4% to 911p.
