London midday: FTSE extends gains as investors eye US inflation reading

London stocks had extended gains by midday on Friday as investors mulled an upbeat consumer confidence survey, with luxury shares boosted by well-received results from LVMH and Remy Cointreau.

The FTSE 100 was up 1.3% at 7,623.56.

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: "The big names of the UK stock market have been lifted higher in the final trading session of the week. Stocks have been given a boost from better-than-expected economic data in the US yesterday.

"Our friends across the pond are seeing economic growth outstrip expectations, while also enjoying the fact that inflation pressures are reducing, according to the personal consumption expenditures index. There are still a lot of plates for the Federal Reserve to spin, and all eyes will now be on PCE numbers later today, which are a favoured inflation gauge.

"The FTSE has also been lifted by news of UK consumer confidence hitting a two-year high. GfK’s consumer confidence index pushed to minus 19 in January, from minus 22. So while there’s still clearly further room for things to improve, the average consumer’s concerns are reducing as hopes for interest rate cuts and lower inflation trickle through. Retailers who have faced a tough Christmas will be hoping these better moods translate into improved spending."

The US PCE figures for December are due at 1330 GMT.

On home shores, the latest GfK survey showed that consumer confidence continued to improve in January to its best level in two years.

GfK’s consumer confidence index increased three points to -19 in January, with shoppers more optimistic about their personal finance situation.

"Consumer confidence has started the year well with all measures up ... the best since January 2022. Importantly, the view on our personal financial situation for the coming year has gained two points and now stands at zero," said Joe Staton, client strategy director at GfK.

"This is exciting as it ends 24 consecutive months of negative scores for this measure and this significant change is the best single indicator for how the nation’s households feel about their income and expenditure."

Staton added that despite the cost-of-living crisis still hitting many households across the UK, consumers appeared to be encouraged by the positive news about falling inflation, currently at 4%.

In equity markets, specialty chemicals firm Croda surged to the top of the FTSE 100 following solid earnings from Lonza and Sartorius, both of which were sharply higher, with analysts suggesting potential read-across to the company’s pharma business.

Diageo rose after well-received third-quarter results from French spirits maker Remy Cointreau, while luxury fashion brand Burberry racked up strong gains after solid results from Louis Vuitton and Christian Dior owner LVMH.

Saga shot up as it said it was considering options for its cruse business, including a partnership arrangement.

Responding to a press report a day earlier, the company said: "The board is exploring opportunities to optimise Saga's operational and strategic position in Cruise, where exceptional demand for its boutique ocean cruise offer means it is operating at close to capacity.

"It has concluded that a partnership arrangement for Ocean Cruise would be consistent with group strategy to move to a capital-light business model to support further growth and crystalise value, reduce debt and enhance long-term returns for shareholders."

WH Smith reversed earlier gains even as it posted an 8% jump in total group revenues for the 20 weeks to 20 January 2024, hailing particularly strong momentum in the travel business.

Fashion brand Superdry also reversed course to trade lower, after it reported a substantial drop in group sales in the first half and said there was no let-up in the "challenging" trading conditions over Christmas as it painted a gloomy outlook for the full year.

Market Movers

FTSE 100 (UKX) 7,623.56 1.25%
FTSE 250 (MCX) 19,272.83 0.26%
techMARK (TASX) 4,372.06 0.42%

FTSE 100 - Risers

Croda International (CRDA) 4,709.00p 4.25%
Diageo (DGE) 2,817.50p 3.97%
St James's Place (STJ) 666.60p 3.12%
Burberry Group (BRBY) 1,314.50p 2.82%
Barclays (BARC) 149.02p 2.50%
Rentokil Initial (RTO) 401.80p 2.37%
Prudential (PRU) 852.60p 2.21%
Entain (ENT) 972.60p 2.12%
Unilever (ULVR) 3,804.50p 2.05%
NATWEST GROUP (NWG) 222.10p 1.93%

FTSE 100 - Fallers

Sainsbury (J) (SBRY) 276.60p -1.71%
Tesco (TSCO) 294.80p -1.34%
BAE Systems (BA.) 1,170.50p -0.97%
Marks & Spencer Group (MKS) 258.50p -0.73%
Rolls-Royce Holdings (RR.) 305.40p -0.36%
Scottish Mortgage Inv Trust (SMT) 776.40p -0.26%
Next (NXT) 8,474.00p -0.24%
InterContinental Hotels Group (IHG) 7,474.00p -0.19%
Centrica (CNA) 144.00p -0.17%
Halma (HLMA) 2,162.00p -0.14%

FTSE 250 - Risers

Wizz Air Holdings (WIZZ) 2,017.00p 3.62%
AJ Bell (AJB) 329.60p 3.13%
Johnson Matthey (JMAT) 1,663.00p 3.10%
Spire Healthcare Group (SPI) 235.50p 2.61%
Games Workshop Group (GAW) 9,850.00p 2.44%
Diversified Energy Company (DEC) 974.50p 2.42%
Victrex plc (VCT) 1,360.00p 2.26%
Virgin Money UK (VMUK) 155.50p 2.10%
Hill and Smith (HILS) 1,860.00p 1.86%
Quilter (QLT) 105.20p 1.84%

FTSE 250 - Fallers

Tullow Oil (TLW) 32.78p -4.99%
WH Smith (SMWH) 1,203.00p -2.35%
Coats Group (COA) 70.50p -2.08%
Allianz Technology Trust (ATT) 321.50p -1.83%
Asia Dragon Trust (DGN) 341.00p -1.73%
Paragon Banking Group (PAG) 711.00p -1.66%
Fidelity China Special Situations (FCSS) 195.60p -1.51%
Indivior (INDV) 1,383.00p -1.43%
Vietnam Enterprise Investments (DI) (VEIL) 561.00p -1.41%
Trustpilot Group (TRST) 177.60p -1.33%