FTSE Builds on Yesterday's Gains

FTSE Builds on Yesterday's Gains

24 May 2016, 13:19
Roberto Jacobs
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FTSE Builds on Yesterday's Gains

The FTSE 100 is trading higher so far this morning and is continuing its bright start to the week, moving above Monday’s high. The market is now trading towards the upper bounds of the recent range after managing to break its losing streak last week. Whilst there’s been little economic reason to support this move higher, the breadth of the move is impressive with the majority of the shares on the index joining in the rally.

Banks lead the way higher
RBS, Standard Chartered and Lloyds all feature prominently on a list of the biggest gainers so far today as the banking sector as a whole looks to post strong gains. The moves upward are even more notable due to these stocks being particularly exposed to downside risks in the event of a Brexit next month, and while the uncertainty around the outcome continues it is unlikely we’ll see substantial additions to these recent price increases. Additionally, supermarket stocks are enjoying a bright start with shares in Tesco up by more than 2.5% in early trading. Whilst the majority of stocks are in the green at the time of writing, Coca-Cola HBC is slipping back, off by more than 3%.

Kingfisher posts strong Q1 results
In terms of earnings releases so far today one of the most notable is Kingfisher, who reported like-for-like sales growth of 3.6% for its first quarter, totalling £2.7bn. With just under half of total sales coming in the UK, analysts and investors take a keen interest in the performance in this market and the rise of 6.2% in like-for-like sales - including a 3.6% rise in B&Q stores - will most likely be viewed favourably. Overall, the report marks a solid start to the year for the retailer and it has seen more than 10% growth in its share price over the past four months. If there is a blip in the update, it is the poor performance in sales in France where its Castorama operations actually experienced a like-for-like sales decline. After the UK, France is the second-most important market in terms of sales volumes, contributing just under 40% of revenue. This is an area that may attract closer scrutiny going forward as a warning sign for further weakness.


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