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UK's FTSE 100 hits record peak; Associated British Foods surges

Tue, 23rd Apr 2024 17:12

Associated British Foods jumps after forecasting growth

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JD Sports Fashion to buy US rival Hibbett; shares up

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FTSE 100 adds 0.3%, FTSE 250 up 1.0%

April 23 (Reuters) -

Britain's blue-chip share index cruised to record highs on Tuesday helped by a weaker pound and positive corporate updates, while Primark owner AB Food led gains on an upbeat profit outlook.

The FTSE 100 climbed to 8,076.52 points, surpassing its previous peak of 8,047.06 touched in February 2023. The index ended 0.3% higher at 1555 GMT, marking its fifth straight session of gains.

Surging commodity prices, a falling pound, gains in defence stocks as well as refreshed hopes of early interest rate cuts from the Bank of England have powered the FTSE 100 higher this year, with investors taking advantage of cheaper valuations in British equities compared to other global markets.

"It's obviously taken a long time to get to its all-time high compared to other markets. The FTSE 100 has underperformed for a very long time and when markets underperform it can mean undervalued," Russ Mould, investment director at AJ Bell, said.

Precious metal miners lost 1.8%, leading sectoral declines, while industrial metal miners followed with a 1.5% slip as metal prices retreated after recent highs.

In corporate updates, Associated British Foods jumped 9.0% to the top of the FTSE 100 after the Primark owner forecast "significant growth" in full-year profit as it reported a 39% jump in the first half.

"The company’s outperformance of a flatlining UK retail sector suggests it is taking market share from less robust rivals," Mould added.

Among other retailers, Ocado led gains with a 5.4% spike after data showed it was the the UK's fastest growing grocer, while also showing that UK grocery price inflation fell for the 14th month in a row in April, partly driven by an increase in supermarkets' promotional activity.

JD Sports Fashion jumped 3.8% after the sportswear retailer proposed to buy U.S. athletic-fashion retailer Hibbett Inc for about $1.08 billion.

The mid-cap FTSE 250 was up 1.0%, hovering near the 20,000 mark.

Petershill Partners was the top performer on the index, climbing 11.3% after the investment firm proposed a tender offer to return up to $100 million to shareholders at a price per share of 2.14 pounds.

Jupiter Fund Management dipped 6.4%, as first-quarter outflows rose.

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