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Upbeat retailers and airlines help FTSE continue strong start to 2023

Strong sessions for retailers, airlines and banks helped drive the FTSE 100 higher as the London markets continued their positive start to the year.

Upbeat trading statements from Next and B&M help drive optimism among traders that consumer demand could have held up stronger than previously expected over the key festive period.

Airlines were also another sector which performed well on Thursday, after Ryanair increased its profit forecast for the year following a strong Christmas.

London’s top index finished the day up 48.26 points, or 0.64%, at 7,633.45.

It represented the FTSE 100’s highest closing price since April.

Elsewhere, the other main European markets took a slight step back after the US Federal Reserve indicated it was in no mood to slow its policy of raising interest rates.

The Dax declined 0.39% by the end of the session and the French Cac finished 0.21% lower.

On Wall Street, the main markets were dented by the improved dollar after stronger jobless claims than expected.

Michael Hewson, chief market analyst at CMC Markets UK, said: “In what has been a positive start to the year, European markets have seen a bit of a pause today in the wake of last night’s release of the latest Fed minutes, today’s better-than-expected US jobs data, and ahead of tomorrow’s US December jobs report.

“The FTSE 100 shrugged off today’s softer vibe in Europe, with another positive session as it benefits from resilience in consumer discretionary and banks, as a host of different retailers report some resilient quarterly updates in the lead-up to Christmas, while a weaker pound is also lending support.”

Sterling was weaker as a result of the booming dollar, driven by the ADP employment report and continued expectations of rate rises.

The pound was down 1.22% against the dollar at 1.191, and was 0.42% lower against the euro at 1.131 at the close.

In company news, Standard Chartered shares jumped after First Abu Dhabi Bank confirmed it considered a failed move to buy the London-listed bank.

The largest bank in the United Arab Emirates told investors on Thursday that it had been at the very early stages of mulling over an offer for Standard Chartered.

Shares in Standard Chartered lifted by 44.8p to 705.2p as a result, and helped drive rises across most of its banking rivals.

High street giant Next was another strong performer on the FTSE 100 after it increased its annual profit outlook after better-than-expected Christmas trading.

Shares rose by 420p to 6,518p after it posted a 4.8% rise in total full-price sales for the nine weeks to December 30

Discounter B&M closed 2.2p higher at 447.4p after it said “bargain-hunting” shoppers helped boost Christmas trade.

The price of oil made modest gains after concerns over demand from China as well as a slowdown in the US offset supply worries.

Brent crude oil increased by 1.32% to 78.87 US dollars per barrel when the London markets closed.

The biggest risers on the FTSE 100 were Standard Chartered, up 50.6p to 711p, Next, up 452p to 6,550p, AB Foods, up 81.5p to 1,754p, Frasers Group, up 31.5p to 767.5p, and Anglo American, up 135p to 3,315p.

The biggest fallers on the FTSE 100 were Pearson, down 56p to 898.4p, Croda International, down 222p to 6,516p, Haleon, down 10p to 313p, Segro, down 20p to 782p, and Fresnillo, down 21p to 946.2p.