As we move towards the final hours on Wall Street, casting minds over to European markets, UK shares were weighed earlier due to poor updates from the likes of Marks & Spencer, Tesco and Halfords – (Marks & Spencer ended lower even after maintaining full-year guidance, although the retailer did post a 3.9% decline in third-quarter group total revenue to £3.04bn).
However, oil climbed higher on Thursday helping the index along and also a softer pound sterling helped the FTSE recover after British secretary of state for business Greg Clark cautioned that crashing out of the European trading bloc without a deal would be a “disaster” for the UK. Clark, who was speaking on BBC radio argued that there was no majority in parliament for a no-deal Brexit. At the start of the day, the markets were cautious over the failed US government shutdown talks and the lower-than-expected Chinese inflation data overnight.
Meanwhile, on the domestic front, the latest figures from the British Retail Consortium and KPMG revealed the worst Christmas for the sector in a decade last month amid worries about Brexit and weak consumer confidence. Sales were flat in December compared to a 1.4% increase in the same month a year before. The end result was marking the worst performance since 2008. “The worst December sales performance in ten years means a challenging start to 2019 for retailers, with business rates set to rise once again this year, and the threat of a no-deal Brexit looming ever larger,” Helen Dickinson, chief executive of the BRC said.
Best and worst performers
The top three performers in the index were Fresnillo (FRES) 949.60p 3.06%, followed by SSE (SSE) 1,151.50p 2.45% and Intertek Group (ITRK) 5,062.00p 2.18%. The worst performers were BHP Group (BHP) 1,616.60p -5.32%, followed by Burberry Group (BRBY) 1,737.50p -2.93% and Paddy Power Betfair (PPB) 6,621.00p -1.77%.
The index has added to the consecutive daily gains above the 23.6% retracement Fibo of the early summer 2018 decline. The 50-D SMA and confluence of the daily pivot are now in the rearview mirror, likely to support on pull-backs. The 7000 psychological level remains in play. The 38.2% Fibo at 7041 guards a run to the 50% Fibo of the same range that is then located at 0.7204. Daily MACD is higher again while RSI still has room to go on the upside.