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.
