Monday, May 21: The FTSE 100(+1.03%) experienced a relief rally after US and Chinese officials signed a trade tension de-escalation agreement which sent the index soaring through the 7800 points barrier to close at a record 7859.17. Asian markets also rallied on the news, which led to a firming up of the Nikkei 225(+0.31%) and the Hang Seng(+0.68%) whilst Wall Street also opened higher. Sterling had shed almost half a percent since the turn of the day, which also helped lift UK indices. Companies with international earnings were the biggest beneficiaries intraday.
The latest research from law firm RPC indicated that the number of retailers entering insolvency has increased 7% to 1,071 from 999, illustrating how firms are continuing to suffer from high costs and impacted by the shift in sales from the high street to the internet. The research also showed that sales at the UK’s top 20 online only retailers jumped by 23% last year to £8.4bn, as high street footfall continued to decline.
Along similar lines, The Guardian reports that M&S will shortly announce the closure of 100 of its larger clothing and food shops. In a further hit to fortunes, the food and clothing retailer may be relegated to the FTSE 250 index as share price falls could render the company too small to reside in the FTSE 100.
Ocado(+7.71%) continued its rally higher whilst supporting the FTSE 250 index intraday. The major Kroger Co. deal seems to have quashed scepticism about the UK online grocer’s retail technology, analyst at RBC Capital Markets opine. The stocks is now 54% higher over the last seven days, 59% higher in the month, and a leading candidate to replace M&S in the FTSE 100.
Across Europe, indices were mixed at the close with the FTSE 100 +1.03%, the DAX 30 -0.28% and the CAC 40 +0.41%.