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Retail grows fastest since 2014 | Scottish Mortgage up
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5pm: Traders await Jackson Hole
Traders sat on their hands most of the day as they awaited the Jackson Hole event in the US and any clues as to tapering of stimulus measures.
Scottish Mortgage Investment Trust was up 1% to 1,366p in the afternoon, nearing the all-time highs seen in February, helped by a rally on the Nasdaq.
The trust, managed by Baillie Gifford, got a boost from its investees Tesla, Amazon and Moderna.
The FTSE 100 closed 16.76 points higher at 7,125.78.
11am: Retail sales at nearly seven year high growth rate
Retail sales grew at the sharpest pace since December 2014 in the year to August, while orders growth hit a survey record high, according to the latest CBI quarterly Distributive Trades Survey.
Sales were also viewed as above average for the time of year, to the greatest extent since September 2015.
The survey of 104 companies, of which 42 were retailers, found that while firms expect orders and sales growth to slow next month, both are ultimately set to remain strong.
Meanwhile, stock levels in relation to expected sales hit a survey record low across retail and the distribution sector as a whole – marking the fifth consecutive month in which a record low has been reached in distribution sector stock levels.
Within retail, the proportion of deliveries from suppliers accounted for by imports also fell sharply, at one of the fastest rates in the survey’s history.
9.45am: FTSE 100 wobbles
After opening in positive territory, the FTSE 100 was trading 5pts lower at 7,103.95.
9.30am: Wood – market reaction
AJ Bell financial analyst Danni Hewson noted the falling half year revenue at energy services group Wood, adding: “More encouraging were the forward-facing metrics like order intake which suggest business is beginning to pick up. Margins are also improving but debt remains elevated, and ticked up uncomfortably in the period.
“As a results the company still appears to be some way of being able to resume dividends, arguably investors would be better served by Wood Group investing to secure its long-term future.
“After all a further complicating factor for the business at present is the transition away from fossil fuels which may also be having a chilling effect on new oil and gas developments.
“The good news for Wood Group is that it has the opportunity to respond to this transition and apply its transferrable skills to the renewables space and other cogs in the decarbonisation wheel.”
Stuart Lamont, investment manager at wealth manager Brewin Dolphin, said: “Today’s update from Wood shows the company is on a positive path towards recovering from the impacts of Covid-19 with long-term contracts being renewed and continuing momentum for the consulting division.
“Its order book is up 18% since the turn of the year, and while revenue is down 22.9%, growth looks set to be on the agenda for the next six months. Although there was a modest rise in debt levels this is expected to fall in the second half as weaker projects are offset by higher margins in consulting and growth in operations.”
7am: Wood orders strong
Energy services company Wood reported good growth in its order book, up c18% to $7.7bn in the year to date, underpinning confidence of a return to growth and the delivery of a stronger second half.
Blue chips were expected to build on yesterday’s gains as private equity bid talk surrounding Sainsbury’s fuels speculation of further M&A activity.
Asia’s stock markets were heading for an improved session although concerns over China’s tightening trip on its tech sector continue to weigh.
The Shanghai Composite jumped 1.30% and Hong Kong’s Hang Seng index surged 1.83%
In Japan, the Nikkei 225 rose 1.03% while South Korea’s Kospi gained 1.05%.
Wall Street ended higher, with the Dow Jones Industrial Average up 0.6%, S&P 500 up 0.9% and Nasdaq Composite up 1.6%.
Brent oil was quoted at $69 a barrel from $68.44 late Monday.