London open: Stocks gain ahead of data slew; Next, JD Sports in the spotlight

London stocks rose in early trade on Thursday ahead of a slew of UK data releases, with retailers Next and JD Sports in the spotlight amid diverging performances.

At 0840 GMT, the FTSE 100 was up 0.4% at 7,712.58.

Investors were mulling the latest minutes from the Federal Reserve released overnight. They showed that officials saw rate cuts as likely this year but didn't give any details on when the central bank might start to loosen monetary policy.

Minutes of the FOMC's 12-13 December meeting showed that "almost all participants indicated that, reflecting the improvements in their inflation outlooks, their baseline projections implied that a lower target range for the federal funds rate would be appropriate by the end of 2024".

However, the Fed said that members' outlooks were "associated with an unusually elevated degree of uncertainty" and that rate hikes could be appropriate if things take a turn for the worse.

Market participants were also digesting the latest data out of China, where the Caixin services PMI rose to 52.9 in December from 51.5 in November. This was above consensus expectations of 51.6 and marked the highest level since July. A reading above 50.0 indicates expansion, while a reading below signals contraction.

Overall new orders rose 2.5 points to 53.7 - the highest since May - while the index for new export orders was up 0.7 points to 52.2.

Pantheon Macroeconomics noted that again, the Caixin PMI showed the opposite picture to the weak official services PMI, which was unchanged at 49.3.

"The mixed picture from the Caixin and official services PMIs points to the regionally uneven nature of China’s recovery and we expect a continued soft recovery in 2024, as households worry about income growth and broad economic prospects," said chief China+ economist Duncan Wrigley.

On the UK macro front, net lending, consumer credit, mortgage approvals and the S&P Global/CIPS services PMI are all due at 0930 GMT.

In equity markets, fashion retailer Next rallied as it lifted annual guidance after better-than-expected full-price sales during November and December. Full-price sales in the nine weeks to December 30 rose 5.7% year-on-year, £38m better than previous guidance of a 2% rise.

Annual pre-tax profit was lifted by £20m to £905m. Of that increase, £17m came from the sales beat to date and £3m from an upgraded forecast for full-price sales in January.

Primark owner Associated British Foods also gained.

Richard Hunter, head of markets at Interactive Investor, said: "In all, Next has shown its mettle once more in a famously competitive environment, in which it is seen as something of a linchpin. Its share price performance has also defied the odds which tend to follow the retail sector, having risen by 35% over the last year, as compared to a gain of just 1.3% for the wider FTSE 100.

"The warm initial price reaction to the update could initiate some upgrades to a market consensus which has yet to break out of its range for a sustained period of time. Indeed, the general view of the shares as a hold, albeit a strong one, has tended to underestimate the strides which the company has been making."

Going the other way, JD Sports tumbled as it delivered a profit warning after second-half trading missed expectations due to milder autumn weather and heavier discounting over the peak holiday shopping season.

The company said the "elevated level of promotional activity" during the peak trading period meant that full-year gross margins would be slightly lower than last year, leading it to cut adjusted pre-tax profit guidance to between £915m and £935m, from £1.04bn at the half-year stage.

Sports Direct owner Frasers Group also lost ground.

Elsewhere, Big Yellow and Dr Martens fell as they traded without entitlement to the dividend.

Market Movers

FTSE 100 (UKX) 7,712.58 0.39%
FTSE 250 (MCX) 19,370.43 0.23%
techMARK (TASX) 4,278.14 0.30%

FTSE 100 - Risers

Next (NXT) 8,514.00p 5.35%
BP (BP.) 479.75p 1.65%
Associated British Foods (ABF) 2,407.00p 1.56%
Beazley (BEZ) 534.00p 1.42%
Rentokil Initial (RTO) 416.60p 1.34%
Marks & Spencer Group (MKS) 285.60p 1.10%
International Consolidated Airlines Group SA (CDI) (IAG) 152.15p 1.10%
Shell (SHEL) 2,620.00p 1.04%
Ocado Group (OCDO) 740.60p 1.04%
Prudential (PRU) 839.20p 0.99%

FTSE 100 - Fallers

JD Sports Fashion (JD.) 130.55p -16.02%
Frasers Group (FRAS) 855.50p -1.78%
BT Group (BT.A) 121.30p -1.34%
F&C Investment Trust (FCIT) 937.00p -1.06%
Kingfisher (KGF) 233.00p -0.77%
London Stock Exchange Group (LSEG) 8,974.00p -0.55%
Unilever (ULVR) 3,832.00p -0.55%
Endeavour Mining (EDV) 1,708.00p -0.47%
Experian (EXPN) 3,044.00p -0.43%
Smurfit Kappa Group (CDI) (SKG) 3,068.00p -0.39%

FTSE 250 - Risers

Kainos Group (KNOS) 1,095.00p 4.58%
Victrex plc (VCT) 1,544.00p 2.12%
TP Icap Group (TCAP) 194.00p 2.11%
Hammerson (HMSO) 28.34p 2.02%
Balanced Commercial Property Trust Limited (BCPT) 73.30p 1.95%
Currys (CURY) 50.10p 1.91%
Ruffer Investment Company Ltd Red PTG Pref Shares (RICA) 276.50p 1.84%
4Imprint Group (FOUR) 4,495.00p 1.81%
PPHE Hotel Group Ltd (PPH) 1,185.00p 1.72%
Playtech (PTEC) 445.80p 1.60%

FTSE 250 - Fallers

Tullow Oil (TLW) 37.12p -4.33%
Petershill Partners (PHLL) 160.20p -4.07%
AO World (AO.) 89.00p -3.42%
Helios Towers (HTWS) 85.75p -2.72%
Coats Group (COA) 74.20p -2.24%
Hilton Food Group (HFG) 760.00p -2.06%
NCC Group (NCC) 122.00p -1.61%
Volution Group (FAN) 411.80p -1.53%
Man Group (EMG) 227.10p -1.52%
Close Brothers Group (CBG) 771.50p -1.22%