DAILY TRADING STRATEGY

Wednesday, Jan 10

UK OVERVIEW

U.K. stocks closed higher Tuesday, with the blue-chip index setting another record as Wm. Morrison Supermarkets PLC helped lead 
gains in retail shares following its upbeat 
Christmas sales update. The FTSE 100 index 
rose 0.5% to end at 7,731.02, topping a prior all-time closing high notched last week and erasing Monday’s drop of 0.4%. The pound traded at $1.3516, down from $1.3568 late Monday in New York. The retail sector was in the spotlight, as Morrison said comparable sales during the Christmas season rose 2.8%. Meanwhile, Kantar Worldpanel said British consumers spent £1 billion more during this year’s Christmas period than last year’s, and that the Friday before Christmas in 2017 was the busiest shopping day ever recorded even as stores offered the lowest level of promotions since 2009. Separately, the British Retail Consortium said U.K. retail sales in December rose by 0.6% on a like-
for-like basis from December 2016, when they had increased 1%. But comparable sales for nonfood items fell 1.9% over the three months to December, the lowest since March 2009. Wm. Morrison Supermarkets PLC shares climbed 2.4% as the company said like-for-like sales, excluding fuel, rose 2.8% during the Christmas period. 
The company, the first U.K. supermarket operator to report its performance after the Christmas season, also backed its fiscal 2018 guidance. Morrison was one of the FTSE 100’s big winners, with rival Marks & Spencer Group also gaining 2.4%. J Sainsbury picked up 3.1%. But Tesco was roughly flat even as Kantar said Tesco was the fastest-growing of the big four supermarkets during the 12 weeks to Dec. 31, as sales rose 3.1%. Tesco’s third-quarter and Christmas update is due Thursday. British American Tobacco PLC shares closed up 0.7% after the company said it expects a 6% increase in 2018 per-share earnings, stemming from U.S. tax cuts. Home-builder Persimmon said revenue rose 9% in 2017 to 3.42 billion pounds ($4.64 billion), and that it expects pretaxprofit for the year to be modestly ahead of market consensus. But its shares were down 1.2%.

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