London pre-open: Stocks seen flat with retailers in focus

Stocks in London were set to open flat on Thursday, with the focus likely to be firmly on retailers amid updates from Marks & Spencer, Tesco, Primark owner Associated British Foods, JD Sports and Debenhams, among others.

The FTSE 100 was called to open unchanged from Wednesday’s close at 7,290.

CMC Markets’ Michael Hewson said: “Steady as she goes seems to be the direction for the FTSE100 this year as once again we saw the main UK benchmark continue its gradual and relentless push to yet another record high as it recorded its longest winning streak since it came into being in 1984.

“The index also managed to post its 12th successive record close in a row, helped in no small part by a pound that sank to its lowest level against the US dollar since the 7th October last year, and even though the pound managed to reverse those declines, the UK benchmark was able to hang onto most of the new gains.”

There are no UK data releases of note due but in the US, initial jobless claims are at 1330 GMT.

In corporate news, Tesco notched an eighth consecutive quarter of like-for-like growth and its first quarterly market share gain in five years.

Over the 13 weeks ended 26 November that made up the third quarter, UK LFL sales rose 1.8% although slowed to 0.7% in the six Christmas weeks to 7 January.

Marks & Spencer’s third quarter revenue rose, including a slight rise from its troubled clothing business, as it continues to roll out its five-year plan to improve productivity.

For the quarter ended 31 December, revenue increased 5.9%, or 4.3% on a constant currency basis, compared to last year, while the clothing and home business was up 3.1%, of which about 1.5% was due to a shift in the reporting period, and like-for-like sales rose 2.3%.

Primark owner Associated British Foods issued a trading update for the 16 weeks to 7 January on Thursday, reporting that group revenue from continuing operations was 10% ahead of the same period last year at constant currency, with good growth delivered by all of its business arms.

As a result of the weakening of sterling in late summer last year, sales from continuing operations at actual exchange rates were strongly ahead with a 22% increase.