High St retailers propel FTSE 100 to a new high - London Report

GAINS at High Street retailers pushed the FTSE100 to a new record high yesterday as Next, Dixons Carphone and Sports Direct all had good news to share.

Dixons Carphone, the electricals and mobile phone retailer, was up two per cent after German mobile telephone company Drillisch agreed to buy the UK company’s chain of telecoms shops, The Phone House Deutschland, for a combination of shares and future cash flows.

Fashion chain Next rose 2.5 per cent after JP Morgan upgraded the shares to “overweight” from “neutral” ahead of the company’s update on 29 April.

The FTSE 100 closed up 21.52 points, or 0.3 per cent, at 7,096.78 points, after rising to a new high at 7,111.72 points.

“The search for a good, secure income remains one of the biggest themes for investors globally – on that basis, UK FTSE 100 equities yielding prospectively four per cent looks pretty good value,” said William Meadon, a fund manager at JP Morgan Claverhouse Investment Trust who holds both Dixons Carphone and Next.

“Strategically, we remain bullish on the internationally exposed FTSE ... we are, however, tactically more cautious ahead of an uncertain general election on 7 May.”

The index’s rally has so far been largely unaffected by the UK election, in which no party is expected to win an outright majority.

Domestically exposed stocks have outperformed the FTSE’s more international names so far this year, although investors are becoming more cautious on the British economy’s outlook.

Continuing that trend, British sports retailer JD Sports Fashion rose 5.8 per cent, a top mid-cap riser, after posting a 22 per cent rise in full-year profit as demand for branded sports shoes in the UK and Europe helped sales soar.

Blue-chip peer Sports Direct rose 3.8 per cent.

“The update from JD Sports is good for the sector, and Sports Direct is seeing follow-through from those good numbers,” Mark Priest, sales trader at ETX Capital, said.

“The sports sector is cleaning up at the moment, and the economy in Britain is rosier than it was. That could all change after the election in a few weeks though.”

Meanwhile proposed EU-wide caps on anonymous “dark” trading and off-exchange deals would have hit nearly every top British stock last year had they been in force, according to data from the London Stock Exchange.