Markets lift as sales figures boost London’s clothes sellers

European markets recovered lost ground from a tough start to the week as investors looked to be piling into Monday’s dip.

In London, the rise was led by major fashion retailers Next and JD Sports, as well as mining companies and gambling firms.

It helped the FTSE 100 index of London’s main firms rise by 46.12 points, or 0.6%.

It came as figures on retail sales showed a 2.1% rise in December compared to the same month a year ago, also up 4.6% compared to 2019.

“However, the British Retail Consortium (BRC) have warned that consumer spending could take a hit thanks to rising inflation and surging energy bills,” said Spreadex expert Oliver Males.

He added: “The World Bank stated today that they expect the global economy to only grow 4.1% this year, down from 5.5% last year, due to the Omicron variant.

“But despite this, many UK economists only expect December and January being flat, as the worst-case scenario, due to how well the UK seems to be handling the virus compared to most other countries, especially across Europe.”

In New York, the Dow Jones had risen 0.1% slightly after UK markets closed, while the S&P 500 was up by 0.5%.

In France, the Cac 40 closed up 1%, while Frankfurt’s Dax remained fairly flat.

“European markets have enjoyed a much better session today, although the bias has been much more defensive in nature with healthcare stocks outperforming, and today’s resilience continuing to contrast with how stocks are performing in the US, where the air looks a little bit thinner,” said CMC Markets analyst Michael Hewson.

He added: “Dechra Pharmaceuticals has stood out near the top of the FTSE 100, after announcing it had acquired the global rights to Verdinexor, a drug that is used in the treatment of canine lymphoma.

“Today’s move higher in Dechra shares also helps to reverse five days of sharp declines which had seen the shares fall over 15% in the space of a week.”

On currency markets, the pound dropped 0.1% against the euro and would buy 1.1991 euros by the end of the day. Against the dollar it rose 0.1% to 1.3619.

In company news, Darktrace reached close to the top of the smaller FTSE 250 index after it revealed a higher earnings and sales outlook for the financial year.

The business said it had seen customer numbers grow by nearly 40%. The business dropped out of the FTSE 100 in December after its share price halved from a high in September.

On Tuesday its shares soared by 6.9%.

Elsewhere, shares in Games Workshop dipped by 10.9% when it said that profits dipped in the last six months.

The business said that sales had grown, but its costs are going up due to increased prices for freight, warehouses and logistics. It also took a £15 million hit from VAT receipts following Brexit.

Pre-tax profits were down by 3.7% in the six months to the end of November.

The biggest risers on the FTSE 100 were Scottish Mortgage Investment Trust, up 57p to 1,196p, Next, up 346p to 8,000p, Dechra Pharmaceuticals, up 146p to 4,446p, JD Sports, up 6p to 218.8p, and Fresnillo, up 20.8p to 336.6p.

The biggest fallers on the FTSE 100 were Reckitt, down 93p to 6,228p, United Utilities, down 1p to 116.1p, Diageo, down 44p to 3,805p, Croda International, down 92p to 8,942p, and SSE, down 16p to 1,622.5p.