London close: FTSE finishes at record high, Ocado leads retail rally
London stocks closed at a record high on Thursday as a stronger oil price and stronger dollar combined with some well received results from Experian and National Grid.
The FTSE 100 closed at 7,779.49, a new record close, beating the closing high of 7,778.64 from 12 January but not surpassing the intraday record from that day, of 7,792.56. This was in spite of the pound rising around 0.26% against the dollar and euro to 1.3525 and 1.1455 respectively.
"The death of the bull market has been greatly exaggerated, not for the first time in recent history," said analyst Laith Khalaf at Hargreaves Lansdown. "The Footsie did endure a shaky start to the year, but after two months of steady climbing, has now regained and surpassed its previous high.
"A stronger dollar, a rising oil price and the postponement of an interest rate rise can all claim some credit for the recent strong showing from the stock market. Investing is of course a long term game, and the twists and turns along the way are less important than the final destination. There will come a time when the stock market will tumble again, at which point investors should take it in their stride and look beyond the immediate situation."
Brexit reports were lifting the pound, even though Prime Minister Theresa May dismissed reports suggesting that the UK was planning on telling Brussels that it was prepared to stay in the European customs union beyond 2021.
Asked at an EU summit in Bulgaria whether the report was true, May said: "No. The United Kingdom will be leaving the customs union as we're leaving the European Union."
Elsewhere, oil prices were in focus as Brent crude hit $80 a barrel for the first time since 2014 after France's Total threatened to withdraw from its large Iran gas field deal following the US decision to exit the Iran nuclear deal.
On the corporate front, gambling stocks were already recovering from the losses suffered earlier as the government confirmed that the maximum stake on fixed-odds betting terminals will be further reduced from £50 to £2. Paddy Power, William Hill and GVC Holdings all reversed course to trade higher, with just 888 Holdings still in the red.
Credit checker Experian gained as it said full-year profits fell but revenue growth accelerated towards the end of the year, while National Grid followed close behind after reporting a 4% rise in full-underlying pre-tax profit.
Luxury fashion brand Burberry was on the rise a day after its results, as analysts including UBS and Credit Suisse bumped up their price targets and estimates for the stock.
Ocado shares rocketed more than 40% higher as it won a contract with US grocery giant Kroger to exclusively provide its online grocery expertise across multiple distribution warehouses across America, while Just Group racked up healthy gains after hailing a strong start to the year.
Elsewhere in the retail industry solid results across the Atlantic from the likes of Walmart, and its Asda UK arm, while shares in Next and Marks & Spencer were also on the leaderboard, with reports that the latter has transferred £1.4bn of its near-£9bn of in pension liabilities to insurance firms Aviva and Phoenix as it looks to reduce the risk on its own balance sheet. Superdry and Dixons Carphone were also elevated, while Tesco was ex-dividend.
"I think US investors seeing interest in UK consumer - they [value investors] have done this before in my career and been right," said analyst Jamie Constable at N+1Singer, who took a more positive stance on selected consumer stocks a couple of months ago."
British Land was also higher after posting a drop in full-year underlying profit but a jump in its net asset value, whereas builder Countryside Properties climbed as it posted a jump in half-year completions, revenue and profit and expressed confidence in the medium term.
Retirement services company Just Group rallied as it reported a jump in first-quarter sales, thanks to a strong performance in defined benefit de-risking, while cybersecurity firm Sophos was in the black as it said full-year billings rose 22% thanks to growth in its integrated cloud-based management platform.
Royal Mail was on the back foot despite new chief executive Moya Greene delivering better-than-expected final results, as the company warned that general data protection regulation laws may lead to a steeper decline in letter deliveries this year.
Hill & Smith was under pressure after saying that the stronger pound against the dollar meant that revenue at the start of the year fell versus the same period in 2017.
Travel operator Thomas Cook retreated after posting a narrowing of first-half losses but saying that the UK remains a drag.
In broker note action, Restaurant Group was cut to 'sell' at Peel Hunt, while Vodafone was downgraded to 'neutral' at Citi, and Mondi was cut to 'neutral' at Goldman Sachs. National Express was knocked down to 'neutral' at JPMorgan and Softcat was hit by a downgrade to 'hold' from 'buy' at Jefferies.
Premier Oil was upgraded to 'overweight' at Barclays, while Gem Diamonds was lifted to 'buy' at Canaccord.
As is usual on a Thursday, ex-dividend stocks were in play, taking 6.8 points off the FTSE 100 and 13.5 points off the 250. HSBC Holdings, Intertek, Saga, Ascential, Clarkson, Dignity and Tesco were among the companies whose stock went ex-div.
FTSE 100 - Risers
Experian (EXPN) 1,804.50p 5.59%
National Grid (NG.) 864.10p 3.80%
Burberry Group (BRBY) 1,928.00p 3.21%
Marks & Spencer Group (MKS) 297.11p 3.09%
United Utilities Group (UU.) 786.40p 2.93%
Next (NXT) 5,794.00p 2.91%
WPP (WPP) 1,324.00p 2.72%
Severn Trent (SVT) 2,027.00p 2.63%
Just Eat (JE.) 824.60p 2.31%
British Land Company (BLND) 697.00p 2.26%
FTSE 100 - Fallers
Royal Mail (RMG) 555.00p -7.16%
Hargreaves Lansdown (HL.) 1,941.00p -1.55%
Mediclinic International (MDC) 671.00p -1.47%
HSBC Holdings (HSBA) 729.90p -1.20%
Coca-Cola HBC AG (CDI) (CCH) 2,571.00p -1.04%
Standard Chartered (STAN) 755.40p -0.79%
Old Mutual (OML) 249.70p -0.68%
Intertek Group (ITRK) 5,104.00p -0.66%
British American Tobacco (BATS) 3,815.00p -0.65%
Anglo American (AAL) 1,883.20p -0.49%
FTSE 250 - Risers
Ocado Group (OCDO) 797.20p 44.42%
Sophos Group (SOPH) 599.00p 8.91%
Just Group (JUST) 150.40p 7.12%
Tullow Oil (TLW) 269.80p 6.01%
GVC Holdings (GVC) 956.56p 4.49%
William Hill (WMH) 330.80p 4.19%
BCA Marketplace (BCA) 191.40p 4.02%
Cairn Energy (CNE) 261.40p 3.98%
Games Workshop Group (GAW) 2,600.00p 3.59%
Capita (CPI) 131.80p 3.58%
FTSE 250 - Fallers
Petrofac Ltd. (PFC) 616.80p -4.96%
Thomas Cook Group (TCG) 139.10p -4.79%
Hill & Smith Holdings (HILS) 1,400.00p -4.76%
Softcat (SCT) 668.00p -4.43%
On The Beach Group (OTB) 502.00p -3.83%
Saga (SAGA) 129.10p -3.80%
SSP Group (SSPG) 627.20p -3.06%
Purecircle Limited (DI) (PURE) 346.50p -2.94%
Pagegroup (PAGE) 533.00p -2.91%
Clarkson (CKN) 2,475.00p -2.75%