View the article online at http://citywire.co.uk/money/article/a983187
Sainsbury's drives record-breaking FTSE higher
Sainsbury's sales bring more cheer to supermarket sector, helping FTSE 100 rise further from yesterday's record-breaking close.
Sainsbury's (SBRY) has driven the FTSE 100 higher, after the index yesterday notched up its ninth successive all-time closing high, marking the longest record-setting run in its 33-year history.
Shares in the supermarket surged 5.6% to 273.2p on forecast-beating Christmas trading. That helped the FTSE 100 rise 12 points, or 0.2%, to 7,287, setting a new all-time intraday high.
Yesterday's all-time closing high of 7,284 meant the UK blue-chip index beat the previous record for successive all-time closing highs of eight set in May 1997.
The FTSE 100's winning streak actually stretches to 11 days, taking into account daily rises before the all-time highs were breached. This matches the previous record, set on three other occasions, for consecutive rises, and could be beaten today.
'The stock market moves down as well as up, but you wouldn't have guessed that if you'd been keeping your eye on the FTSE for the last few weeks,' said Laith Khalaf, senior analyst at Hargreaves Lansdown.
'While the FTSE 100 stands at a record level, valuations on the UK stock market are not at abnormally high levels once you factor in the earnings produced by UK companies.'
Sainsbury's' solid results, a modest 0.1% rise in third quarter sales that nevertheless beat analysts' forecasts of a drop in sales following the second quarter's fall, meanwhile added to the cheer surrounding the supermarket sector, after yesterday's strong sales announced by Morrisons (MRW), which rose a further 1.4% to 249.4p today.
Sainsbury's chief executive Mike Coupe noted the supermarket had enjoyed its best Christmas week ever, with £1 billion in sales, while sales at last year's purchase Argos were up 4.1%.
Russ Mould, investment director at AJ Bell, said investors were likely to be relieved by the strong showing.
'It is still early days - and for those who believe that life begins to the left of the decimal point, a 0.1% increase in like-for-like sales at the supermarket operation is no big deal - but at least Sainsbury's is generating some positive momentum,' he said.
'This is a welcome change - Sainsbury's even cut its interim dividend from 4p to 3.6p back in the autumn - and it may be enough to stir interest from investors, especially as the company is one of the battalion of domestically-focused stocks which have largely been ignored by the post-Brexit market rally.'
Tui AG (TUIT) was meanwhile the biggest faller on the FTSE 100, down 4.6% at £11.36 after the travel stock was hit by a downgrade from analysts at Credit Suisse. They also cut their rating on rival Thomas Cook (TCG), sending shares in the FTSE 250 stock 4.4% lower to 84.4p.
But Cobham (COB) was the biggest 'mid cap' faller, down 14.9% at 140p after the aerospace and defence company missed its profit target and scrapped its final dividend.
Among 'small cap' stocks, Interserve (IRV) rose 7.5% to 342 after the embattled building maintenance company reported a better-than-expected debt position.
Estate agents found themselves in the red, with Countrywide (CWD) down 6.3% after a downgrade from analysts at Peel Hunt.
Foxtons (FOXT) dropped 4.8% to 94.3p after reporting a 50% fall in 2016 earnings and warning profits could continue to fall next year.
News sponsored by:
Making the most out of Europe's potential means seeing things differently. Learn more about how BlackRock's focused approach to investing in Europe helps investors unlock the continent's vast potential.
In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.
More about this:
Look up the shares
- J Sainsbury PLC (SBRY.L)
- WM Morrison Supermarkets PLC (MRW.L)
- Tui AG (TUIT.L)
- Thomas Cook Group plc (TCG.L)
- Cobham PLC (COB.L)
- Interserve PLC (IRV.L)
- Countrywide PLC (CWD.L)
- Foxtons Group PLC (FOXT.L)
Tools from Citywire Money
From the Forums
Weekly email from The Lolly
Get simple, easy ways to make more from your money. Just enter your email address below
An error occured while subscribing your email. Please try again later.
Thank you for registering for your weekly newsletter from The Lolly.
Keep an eye out for us in your inbox, and please add firstname.lastname@example.org to your safe senders list so we don't get junked.