Associated British Foods is the biggest laggard on the FTSE 100 this morning, dipping 2.1pc, despite lifting its full-year guidance as sales and margins improve at its key Primark business.
ABF said that the discount fashion retailer will enjoy a 13pc rise in sales on a constant currency basis despite the bleak consumer backdrop.
The company is “well ahead of last year”, according to Hargreaves Lansdown analyst George Salmon.
He added on what the results mean for the rest of the struggling high street:
“The UK has been singled out as performing particularly strongly, which would normally have positive read-across for the rest of the clothing sector. However, this probably isn’t the case this time.
“We feel Primark’s good domestic performance is more a sign the UK consumer is tightening the purse strings and moving down the value chain as inflation outstrips wage growth.”
North Korea nuclear no-show lifts sentiment on the markets
North Korea’s nuclear no-show over the weekend has lifted the mood on European stock markets this morning with all the major indices rebounding after a gloomy week of trading last week.
There were fears that the rogue state would conduct its latest round of tests on Saturday, the nation’s founding day, with tensions rising on the UN Security Council over whether to ban the country’s oil imports.
Gold has been pulled off its 13-week high, bringing down shares in FTSE 100 precious metal miners Fresnillo and Randgold Resources, while safe haven the Japanese yen is the biggest laggard on the currency markets, slipping 0.5pc against the dollar.
The mood has also been helped by Hurricane Irma’s strength waning, according to Accendo Markets analyst Mike Van Dulken.
“This helpful combo has seen a return of risk appetite and corresponding fall in demand for safe havens. Equities and base metals thus called higher at the expense of Gold, Silver, bonds, the Japanese Yen and Swiss Franc.”
Agenda: Rising risk appetite pulls up European stock markets
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Rising risk appetite on the markets has lifted the FTSE 100 back into positive territory this morning with pharma giant AstraZeneca leading the index after jumping just under 3pc on successful lung cancer drug trial results.
Four negative sessions last week pulled the UK’s blue-chip index lower but the mood on European stock markets has improved over the weekend with the DAX and CAC 40 enjoying strong rebounds.
Gold’s retreat this morning as risk-on mood returns to the markets has wounded precious metal miners Randgold Resources and Fresnillo while ABF has nudged down despite raising its full-year outlook thanks to strong results in its Primark business.
The economics calendar has a very light look to it but any wobbles in passing the Repeal Bill in parliament later today could stoke some movement on currency markets.
With inflation and wage growth data due in the coming days, you couldn’t blame traders for sitting on their hands until they get hold of this week’s highlight economics figures. This morning, the pound has held onto its six-week high against the dollar from Friday, trading flat at $1.3190.
Interim results: Restore, Luceco, Deltex Medical Group, EKF Diagnostics Holdings, Cloudcall Group, John Laing Infrastructure Fund, XLMedia, Pennant International Group, Crossrider
Full-year results: Abcam, K3 Capital Group, 1pm
Trading statement: Associated British Foods
AGM: Real Estate Credit Investments, CH Bailey, Empyrean Energy