London midday: FTSE extends gains; JD Sports surges

(Sharecast News) - London stocks had extended gains by midday on Wednesday, with retailers on the rise after a well-received update from JD Sports. The FTSE 100 was up 0.6% at 7,740.47, having taken its opening cue from a positive session in the US, after Fed chair Jerome Powell refrained from saying anything about rate policy in a speech in Sweden.

Russ Mould, investment director at AJ Bell, said: "Ahead of US inflation numbers on Thursday, markets were relatively upbeat with a good showing on Wall Street last night which spilled over into a positive sentiment among investors in European stocks.

"It helped that a speech by Federal Reserve chair Jerome Powell yesterday didn't contain any shocks which would cause investors to worry about markets even more."

In equity markets, JD Sports Fashion surged to the top of the FTSE 100 after saying it expects annual profits to be at the top end of expectations after revenues grew by more than a fifth over the Christmas period.

Current market expectations for the year to January 28 are for group profit before tax and exceptional items of £933m-985m although the final figure will reflect trading through the rest of January with the post-Christmas sale period still to take place in some of the company's most important European markets.

Sports Direct owner Frasers and Next also rose.

On the downside, insurer Direct Line tanked after axing its final dividend for 2022 as it took a hit from claims related to severe cold weather and increases in motor inflation. Admiral, Sabre Insurance, Aviva and Hiscox all fell.

Russ Mould said: "If you thought everything bad has gone wrong for Direct Line, it's important to consider the knock-on effect of these events. Questions are going to be asked about the strength of the company's balance sheet and whether it has enough capital. The company admits that its capital coverage is now at the lower end of its risk appetite, so might we see a big fundraise soon?

"Saving money by not paying a dividend is one way to preserve cash yet the thousands of pensioners owning the stock for income won't be happy. Direct Line has historically been a generous dividend payer and a lot of people have got used to a growing stream of cash rewards from the business."

Cybersecurity firm Darktrace tumbled after it lowered annual revenue forecasts as potential customers balked at trialling the company's products amid the tougher macro-economic environment.

Sainsbury's was under the cosh even as it increased full-year profits guidance after "record" Christmas trading.

Barratt Developments lost ground after the housebuilder flagged a more uncertain outlook following a "marked slowdown" in the UK housing market.

Recruiter PageGroup retreated after it downgraded its full-year profit expectations following a slowdown in the fourth quarter.

Market Movers

FTSE 100 (UKX) 7,740.47 0.60% FTSE 250 (MCX) 19,604.90 1.10% techMARK (TASX) 4,518.79 0.79%

FTSE 100 - Risers

JD Sports Fashion (JD.) 149.40p 6.03% 3i Group (III) 1,445.00p 3.29% Frasers Group (FRAS) 744.00p 3.05% SEGRO (SGRO) 814.20p 2.93% Ocado Group (OCDO) 740.20p 2.75% BT Group (BT.A) 128.55p 2.72% WPP (WPP) 904.00p 2.66% Next (NXT) 6,432.00p 2.65% St James's Place (STJ) 1,179.50p 2.57% Unite Group (UTG) 950.00p 2.54%

FTSE 100 - Fallers

Admiral Group (ADM) 2,083.00p -8.32% M&G (MNG) 189.05p -3.82% Aviva (AV.) 441.90p -3.60% Legal & General Group (LGEN) 249.20p -3.52% Phoenix Group Holdings (PHNX) 610.80p -2.12% Sainsbury (J) (SBRY) 241.50p -1.75% Lloyds Banking Group (LLOY) 47.51p -1.09% Barratt Developments (BDEV) 419.40p -0.99% Imperial Brands (IMB) 2,033.00p -0.93% BAE Systems (BA.) 831.80p -0.91%

FTSE 250 - Risers

Aston Martin Lagonda Global Holdings (AML) 169.35p 7.59% Keller Group (KLR) 762.00p 4.38% IWG (IWG) 181.00p 4.29% Urban Logistics Reit (SHED) 137.50p 4.17% UK Commercial Property Reit Limited (UKCM) 58.60p 4.09% HGCapital Trust (HGT) 374.50p 4.03% Hammerson (HMSO) 26.15p 3.93% Tritax Big Box Reit (BBOX) 149.20p 3.90% Howden Joinery Group (HWDN) 640.20p 3.86% Baltic Classifieds Group (BCG) 151.00p 3.85%

FTSE 250 - Fallers

Direct Line Insurance Group (DLG) 170.00p -26.85% Darktrace (DARK) 252.90p -13.80% Kainos Group (KNOS) 1,460.00p -6.65% Close Brothers Group (CBG) 1,069.00p -4.55% Future (FUTR) 1,390.00p -2.93% Hiscox Limited (DI) (HSX) 1,107.00p -1.16% Moonpig Group (MOON) 118.10p -1.09% Hikma Pharmaceuticals (HIK) 1,657.00p -0.96% Wizz Air Holdings (WIZZ) 2,598.00p -0.95% Discoverie Group (DSCV) 754.00p -0.92%