London Markets: FTSE 100 flirts with fresh record as Morrisons leads retailers higher

U.K. stocks pushed higher Tuesday, with the blue-chip index on course for another record as Wm. Morrison Supermarkets PLC led gains in retail shares following its upbeat Christmas sales update.

What the market is doing: The FTSE 100 index UKX, +0.34%  rose 0.3% to 7,721.22, just shy of its all-time closing high of 7,724.22 notched last week. All sectors rose Tuesday, with the basic materials group putting in the stronger performance. On Monday, the index fell 0.4%.

The pound GBPUSD, -0.3611%  traded at $1.3553, down from $1.3568 late Monday in New York.

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What’s driving the market: The retail sector was in the spotlight, as Morrisons said comparable sales during the Christmas season rose 2.8%.

“Helping the FTSE out was a giddy Morrisons, which broke the Debenhams-then-Mothercare double whammy of truly terrible post-Christmas updates with a rather impressive statement of its own,” said Connor Campbell, financial analyst at Spreadex, in a note.

Meanwhile, Kantar Worldpanel said British consumers spent £1 billion more during this year’s Christmas period than last year’s, and that the Friday before Christmas in 2017 was the busiest shopping day ever recorded even as stores offered the lowest level of promotions since 2009.

Separately, the British Retail Consortium said U.K. retail sales in December rose by 0.6% on a like-for-like basis from December 2016, when they had increased 1%. But comparable sales for non-food items fell 1.9% over the three months to December, the lowest since March 2009.

Corporates: Wm. Morrison Supermarkets PLC shares MRW, +3.61%   climbed 3.8% as the company said like-for-like sales, excluding fuel, rose 2.8% during the Christmas period. The company, the first U.K. supermarket operator to report its trading performance after the Christmas season, also backed its fiscal 2018 guidance.

Morrison’s topped the FTSE 100, with shares of rival J Sainsbury PLC SBRY, +1.29%  picking up 1.8%, and Marks & Spencer Group PLC MKS, +1.96%  gaining 1.6%.

But Tesco PLC TSCO, -1.12%  fell 1.2% even as Kantar said Tesco was the fastest growing of the big four supermarkets during the 12 weeks to Dec. 31, as sales rose 3.1%. Tesco’s third-quarter and Christmas update is due Thursday.

British American Tobacco PLC shares BATS, +0.81% were up 0.8% after the company said it expects a 6% increase in 2018 per-share earnings, stemming from U.S. tax cuts.

Home builder Persimmon PLC PSN, -1.46% said revenue rose 9% in 2017 to 3.42 billion pounds ($4.64 billion), and that it expects pretax profit for the year to be modestly ahead of market consensus. But its shares were down 1.3%.

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