A rebound in clothing sales in May as the warmer weather brought out the summer shoppers has helped lifted previously becalmed retailers.
The British Retail Consortium’s latest survey has pushed Next up 75p to £54.35, while Marks & Spencer is up 2.3p at 365.7p and Burberry is 15p better at £10.94.
So it is another bright start for the FTSE 100, up 42.40 points at 6315.80 to hit its highest level since the end of April as equities continue to shrug off Brexit fears. After Monday’s raft of polls showing the Leave side in the ascendency, a couple of new surveys show Remain marginally ahead which has helped a recovery in the pound.
Commodity companies are among the main gainers, prompted by dollar weakness following the latest comments from US Federal Reserve chair Janet Yellen. She said in a speech on Monday that she still expected gradual rate rises but hinted they were not imminent, given Friday’s poor US jobs figures. Oil is also holding firm above $50 a barrel, with output problems in Nigeria expected to hit supply.
Royal Dutch Shell B shares are leading the way, up 45p at £17.57 as it said it expected savings of $4.5bn from the integration of BG, up $1bn from initial estimates.
Anglo American has added 2.8p to 689.4p while BHP Billiton is 10.4p better at 896.2p. Joshua Mahony, market analyst at IG, said:
European markets have a clear appetite for risk this morning, as rising energy prices and a dovish Fed outlook help negate any threat from a potential Brexit in 16 days’ time. This risk-on environment has predictably seen flows into stocks at the expense of perceived havens such as gold, treasuries and the yen. As crude prices once more trade around the $50 mark, there is a feeling that hurdles are being overcome with regularity over recent months.
Elsewhere insurer esure has climbed 5.8p to 288.8p after saying it may spin off its Go Compare business. But rival Direct Line is down 3.4p at 372.2p and Admiral is 5p lower at £19.71. Direct Line is down despite a hold note from Peel Hunt:
The main catalyst for the stock continues to be the potential for excess capital to be returned to shareholders at the end of the year. As Direct Line moves towards an internal solvency model, capital requirements might decline, freeing up surplus in the process. In addition, upside risk to reserve releases combined with the ongoing tailwind of Motor rate increases, may further boost earnings hence excess capital generation. The attractive dividend yield (7% including a special dividend) and close to sector multiples (average PE 13 times 2017 estimates) warrant a hold recommendation.
Tullett Prebon has fallen 8.4p to 316.8p as the Competitions and Markets Authority said it would refer the company’s planned merger with Icap’s voice broking business for an in depth probe unless a number of concerns were met. Icap is down 3.9p at 430.2p.
Sports Direct International is up 13.5p at 3779.1p ahead of founder Mike Ashley’s appearance before a select committee.
