By Carla Mozee and Sara Sjolin, MarketWatch
Sainsbury's stock rises after strong Argos Christmas sales
U.K. stocks recorded an all-time closing high for a 10 straight session on Wednesday as the pound moved deeper into negative territory and kept supporting shares of the country's major exporters.
The FTSE 100 climbed 0.2% to finish at 7,290.49, extending gains to a 12th consecutive trading day, its longest winning streak ever.
The U.K. blue-chip index has now ended higher on every single day of 2017, with the winning run marking its longest string of record closes since FactSet began collecting data in 1986.
'The question now is when this will end--can we call the top of the market? All the records are sparking renewed interest from retail investors, but this rally in the stock market has a decidedly speculative bubble appearance,' said Neil Wilson, senior market analyst at ETX Capital, in a note.
'Until we get a decision from the government on what sort of Brexit we get, the value of sterling--and by extension U.K. stocks--hangs in the balance,' he added.
The index had been down as much as 0.3% Wednesday morning, but started swinging higher as the pound dropped after U.K. data showed a widening of the country's trade deficit in November (http://www.marketwatch.com/story/uk-industrial- output-rises-trade-deficit-widens-2017-01-11). U.K. stocks also got a boost from Bank of England Gov. Mark Carneystating in front of the Treasury Select Committee that Brexit is no longer the most significant downside risk (https:// www.theguardian.com/business/live/2017/jan/11/wef-global-economic-risks-trump-brexit-business-live?page=with:block- 587640e2e4b0710de27b870d#block-587640e2e4b0710de27b870d) to the U.K. economy.
Pound selloff: Sterling has been moving lower all week as investors worry about the prospect of a 'hard Brexit,' which would blunt access by U.K. businesses into the European Union's single market. Sterling depreciation typically boosts the earnings of U.K. exporters, beneficial to sales for British multinationals.
The pound on Wednesday slid to an intraday low of $1.2038, trading around levels not seen the sterling flash crash in October. The pound, however, trimmed losses during U.S. President-elect Donald Trump's news conference to $1.2123, compared with $1.2167 late Tuesday in New York.
Individual movers: Drugmakers headed lower after Trump in his first full-scale press conference since July lashed out at the drug industry. The president-elect said that more bidding is needed on drug prices (http://www.marketwatch.com/ story/biotech-etfs-fall-as-trump-says-more-bidding-needed-on-drugs-2017-01-11), implying legislation that could erode the sector's profitability.
'They're getting away with murder,' Trump said of drug companies.
Shares of Shire PLC (SHPG) (SHPG) lost 3.2%, Hikma Pharmaceuticals (HIK.LN) fell 1.2%, AstraZeneca PLC (AZN.LN) gave up 1.8% and GlaxoSmithKline PLC (GSK.LN) (GSK.LN) slipped 0.8%.
Shares of Sainsbury's (SBRY.LN) rose 1%. The U.K.'s second-biggest supermarket chain by market share said its total retail sales, excluding fuel, were up 0.8% in the 15 weeks ended Jan. 7 (http://www.marketwatch.com/story/sainsburys- christmas-sales-rise-marginally-2017-01-11).
'Whilst these Sainsbury numbers are not sufficient to shoot the lights out, they are comfortably ahead of expectations. In particular, the contribution from the online and convenience channels is strong, whilst the integration of Argos is already beginning to bear fruit,' said Richard Hunter, head of research at Wilson King Investment Management, in a note.
Sainsbury's bought Home Retail Group PLC, the parent of Argos, last year. Same-store sales at the home and general retailer rose 4% in the Christmas-related quarter.
TUI AG fell 4.5% following a ratings downgrade of the travel services company to underperform from outperform at Credit Suisse.
Home builder Taylor Wimpey PLC (TW.LN) said it expects to report 2016 profit at the upper end of market consensus (http://www.marketwatch.com/story/taylor-wimpey-upbeat-on-profit-reaffirms-dividend-2017-01-11) and reaffirmed its medium-term dividend payout target. But shares turned lower, ending down 2.5%.
-Carla Mozee; 415-439-6400; AskNewswires@dowjones.com
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