DAILY TRADING STRATEGY

Friday, Jan 12

UK OVERVIEW

U.K. stocks logged a fresh record close on Thursday, with tobacco and mining companies boosted by a weaker pound during the session and a rise in metals prices. Supermarkets, however, limited gains for the London benchmark after disappointing trading updates from retailers Tesco and Marks & Spencer covering the crucial Christmas sales period. The FTSE 100 index added 0.2% end at 7,762.94, taking out the record close of 7,748.51 set on Wednesday. The pound bought $1.3540 after trading as low as $1.3458. While other global markets have taken a breather from their recent rally, the FTSE has continued to keep a toehold in record-setting territory. On Thursday, the action in London was focused on sectoral moves. Miners helped lift the benchmark on Thursday, as copper prices gained for a second straight day and inched closer to a four-year high. Heavyweight tobacco companies also lent a helping hand, getting a boost from the drop in the pound during the day. Tobacco companies generate the majority of their sales outside the U.K., so weaker sterling lifts their earnings when translated back into the U.K. currency. 

But the pound was eventually pushed back above $1.35, “lifted in the wake of the ECB minutes –as the U.S. dollar sold-off,” after minutes of the ECB’s December meeting suggested it may take a more hawkish stance on monetary policy in 2018, CMC Markets noted. Shares of Marks & Spencer Group PLC slid 7%, after the retailer and supermarket chain said like-for-like total U.K. sales declined 1.4% in the 13 weeks to Christmas. Like-for-like food sales fell 0.4%, while clothing and home sales dropped 2.8%. In the same vein, Tesco PLC lost 4.5%. The company, Britain’s largest supermarket chain, said it’s confident in its outlook for fiscal 2018 after like-for-like U.K. sales rose 1.9% during the Christmas period. However, the general merchandise business and slower tobacco sales dragged on total performance, leaving analysts overall disappointed. Shares of J Sainsbury PLC were fell 2.1% on Thursday, and Wm. Morrison Supermarkets PLC lost 1.4%.. 


DOWNLOAD FULL DOCUMENT
Top