The FTSE 100 recorded its best week in four months as luxury and alcohol values soared as consumers continue to shift towards premium products.
On an upbeat day for investors, the blue chip index rose 1.4 percent, or 105.36 points, to 7,635.09.
The FTSE 250, meanwhile, gained 0.6 percent, or 114.92 points, to 19,338.02.
This took the FTSE 100’s gains this week to more than 2.3 percent – its best performance since mid-September.
Yesterday’s rise was driven by luxury and alcohol stocks after a handful of reassuring updates brought much-needed respite to two sectors that have been under pressure as shoppers cut back on purchases expensive.
Boost: On an upbeat day for investors, the blue-chip index rose 1.4 percent, or 105.36 points, to 7,635.09.
Barclays improved the European luxury sector after LVMH on Thursday reported record sales and profits last year following a strong final quarter.
The feel-good factor surrounding the French giant swept through London-listed companies, with Burberry up 4.9 per cent, or 63p, to 1,341.5p. And drinks giant Diageo gained 5.1 per cent, or 139p, to 2849p after cognac maker Rémy released upbeat results.
Russ Mould, investment director at AJ Bell, said: “It appears the sector may be going through a phase where investors reward companies who say things are not as bad as feared, rather than saying that everything’s OK.”
But not everyone was so optimistic. JP Morgan analysts believe the positive sentiment surrounding UK retailers is likely to change over the next two to three months.
The bank cut its ratings on Tesco and Sainsbury’s, Britain’s two largest supermarkets, as it expects them and others to experience a slowdown comparable to that of their fellow grocers in the United States and in Europe. Shares in Tesco fell 1.8 per cent, or 5.3p, to 293.5p and Sainsbury’s lost 1.9 per cent, or 5.4p, to 276p.
Tullow Oil’s rating was also downgraded as Stifel analysts warned the West African energy company’s debts would hit production. Shares fell 6 per cent, or 2.08p, to 32.42p.
First Group, the transport group behind Avanti West Coast and Great Western Railways (GWR), has decided to expand its presence in North Yorkshire with the purchase of coach and bus operator York Pullman. But shares slipped 0.1 per cent, or 0.2p, to 169p.
Another company that made gains was home improvement company Wickes, after saying it expects 2023 profits to be at the high end of forecasts. Shares rose 8.4 per cent, or 12.1p, to 157p.
After the best summer ever, business is still booming for On the Beach. The value of vacations booked during its peak period, through January 24, was 27 percent higher than a year earlier. But shares slipped 2.2 per cent, or 3.6p, to 160.4p. Premier Inn owner Whitbread has traded higher after extending its £300m share buyback program by three months. The stock rose 1.3 percent, or 45p, to 3646p.
There was also good news for investors in digital advertising agency S4 Capital after it outlined its proposed £2.7m share buyback just days after announcing a 4 per cent drop of its earnings for 2023. Shares rose 6.1 per cent, or 2.48p, to 42.94p.
Even a profit warning hasn’t stopped car dealership Motorpoint announcing plans to buy back shares worth £5m from investors.
The company expects profits for the year to March 31 to be up to £6 million lower than forecast after a difficult third quarter. Alongside the share buyback plans, Motorpoint remained optimistic about its cost-cutting plans and hopes of a rebound in the used car market. Shares added 0.7 per cent, or 0.7p, to 98.7p.
Lender Paragon Bank has had a positive start to the financial year and reiterated its annual guidance. But shares slipped 1.5 per cent, or 11p, to 712p.