The FTSE 100 finished 0.81% in the green at 7,551.72 points on Wednesday, building on Tuesday’s rally despite US CPI inflation hitting 7% in December, a 40-year high.
With markets already pricing in rate rises, investors took the US inflation print in their stride, though it would have been a different story if the figure had strayed above the 7% most analysts had been expecting.
Global equities were also supported by remarks from Jerome Powell, chairman of the US Federal Reserve, and the Bank of Japan, which painted positive pictures about their respective economies.
The FTSE’s mining and oil giants were boosted by the weaker dollar and an accompanying rise in commodity prices, among them Antofagasta (ANTO), up 7.5% to £14.43, BHP (BHP), marked 4.5% higher to £23.75 and BP (BP.), 3.2% to the good at 381.5p.
Investors’ spirits were also buoyed by guidance upgrades from retailers Sainsbury’s (SBRY), JD Sports Fashion (JD.) and Dunelm (DNLM).
RETAILERS RAISE GUIDANCE
Supermarket giant Sainsbury’s rose 3.1% to 288p after the retailer increased its profit guidance for the year to March thanks to a stronger than expected performance in the third quarter and over Christmas in particular.
Sportswear retailer JD Sports Fashion was down 3.3% to 211.5p despite forecasting a full year earnings beat after enjoying bumper sales over Christmas period. The tracksuits-to-trainers seller now forecasts a headline pre-tax profit of at least £875 million, ahead of market expectations averaging £810 million.
Homewares retailer Dunelm gained 5.2% to £14.09 as it posted a record quarterly performance amid bumper Christmas trading and pointed to a full year profit ‘materially ahead’ of expectations.
The outlook was supported by strong sales and margin performance in the second quarter and the first half of the year, with pre-tax profit in H1 expected to have jumped to £140 million from £84 million. The company now expects full year pre-tax profit to comfortably beat the £181 million market estimate for the 12 months to June 2022.
Home improvement retailer Topps Tiles (TPT) slipped 0.6% to 63.6p as it achieved a modest rise in first quarter like-for-like sales, but also warned supply chain pressures would hurt its margins.
AROUND THE MARKET
Distribution and services giant Bunzl (BNZL) gained 2% to £27.77 after the FTSE 100 firm completed the acquisition of Tingley Rubber Corporation, a distributor of own brand PPE based in New Jersey.
Customer review platform Trustpilot (TRST) cheapened 2.1% to 273p despite guiding for a 29% rise in annual revenue, beating its expectations.
Trustpilot’s revenue for the year to December is seen jumping to $131 million, up from $102 million year-on-year, with growth on a constant currency basis of 24%.
Building materials distributor Grafton (GFTU) was also in on the upgrades, firming 2.5% to £12.11 after it said it expected annual adjusted operating profit within the top end of expectations.
Shares in Accrol (ACRL:AIM) slumped 19.4% to 24.8p after its second severe profit warning in four months.
Accrol, which supplies loo rolls, tissues and kitchen wipes to many leading UK supermarkets and discounters, is being tightly squeezed by rising energy costs but paper pulp prices have also been rising sharply, as have supply chain costs.
The warning is serious enough to spark the company into kick-starting a full strategic review of the business, which explains the severity of the share price plunge.
Fantasy worlds video game developer and publisher Frontier Developments (FDEV:AIM) dropped 25.3% to £13.24 after management lowered guidance again after delaying the release of its Warhammer Age of Sigmar IP real-time strategy game.
The company reported an operating loss for the first six months to 30 November and narrowed its forecast revenue guidance for 2022 to between £100 million and £120 million from £130 million at the top end.
M Winkworth (WINK:AIM) was marked up 6.2% to 207p after the London-focused estate agency franchisor raised its guidance yet again and also signalled it will pay an enhanced final ordinary dividend and a third special dividend.
