European shares up, Britain’s FTSE set for record-breaking streak

By Kit Rees and Helen Reid LONDON, Jan 11 : European shares rose on Wednesday, with retail stocks back in focus after a well-received update from British grocer Sainsbury, though Cobham tanked on disappointing profits.

The pan-European STOXX 600 index was up 0.2 percent, while blue-chip FTSE 100 hit a record high of 7,289.79, up 0.2 percent, and was headed for the best winning streak in its history.

If the index closes up again today it will mark its 12th straight higher close, the longest period of consecutive gains since at least 1984. However the total gains have been modest, around 3.6 percent over the whole rally.

“The FTSE has not exploded higher, it has inched higher,” said Michael Hewson, CMC Markets analyst.

Sainsbury’s was in the top European gainers, jumping 5.5 percent to reach its highest level since May, after Britain’s second-biggest supermarket beat forecasts for underlying sales in its Christmas quarter.

This followed peer Morrison’s strong performance in the previous session after it too reported robust figures.

“UK supermarkets seem to be in rude health following bullish statements from both Morrison’s and Sainsbury’s,” said IG analyst Josh Mahony.

Danish bioscience company Chr Hansen was top of the STOXX, gaining 5.4 percent on consensus-beating first-quarter earnings.

British aero engineering firm Cobham weighed on the STOXX, slumping more than 15 percent, after it missed its profit target and scrapped its final dividend.

Cobham’s 2016 trading profit fell short of a target it had cut just two months before the end of the year because of poor trading. It was headed for its worst day ever, through nearly three days’ trading in mid-morning.

UBS equities analysts said a recent change in management, with a new CEO and CFO, meant further revisions were likely once new managers undertake a deep review of the business.

French utilities company Engie was the top CAC 40 faller, down 3.5 percent after France’s government sold 100 million of its shares in the company at a 4 percent discount to the closing price, though it remained main shareholder with a 29 percent stake.

British tourism company TUI also weighed on the STOXX, down 5.6 percent after a double downgrade from Credit Suisse to ‘underperform’ because of a difficult outlook for its two largest markets, the UK and Germany.

Britain’s testing equipment manufacturer Spectris, however, benefited from a double upgrade from BAML to rise to the top of the mid-cap FTSE 250, up 4.4 percent.

Spain’s IBEX was the only major European index to fall, weighed down by banks BBVA and Banco Popular.

/Reuters

Related posts

Leave a Reply

*