January 3, 2014 / 11:51 AM / 4 years ago

Clothing retailer Next nudges UK's FTSE higher

2 Min Read

* Next hits record high after lifting profit outlook

* FTSE edges higher in mid-session trading

* FTSE to hit 7,000 in Q2 - SVM's McLean

By Sudip Kar-Gupta

LONDON, Jan 3 (Reuters) - A surge in clothing retailer Next nudged Britain's top equity index up on Friday, with many traders expecting the market to push on to record highs later this year.

The blue-chip FTSE 100 index was up by 0.1 percent, or 7.12 points, at 6,724.31 points in mid-session trade.

Next shares hit record highs after the company raised its annual profit outlook following strong Christmas sales. The shares rose as much as 11 percent and added the most points to the FTSE 100.

"In all, Next investors are again being rewarded. Current full-year profits are now expected to exceed prior management forecasts, although reassuringly, management appears to remain level headed," said Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers.

Rival retailer Marks & Spencer - which sells both clothes and food - advanced by 4 percent as traders hoped for a similarly strong result from M&S after Next's performance.

SVM Asset Management managing director Colin McLean said that while he was not that positive on UK food retailers due to worries that they have been losing market share to German rivals Aldi and Lidl, he was more upbeat on clothing retailers such as Next.

McLean felt companies in that sector would benefit from a gradual recovery in the British economy and in consumers' spending power.

He said he expected the FTSE 100 to hit a record level of 7,000 points in the second quarter of 2014. The index rose 14.4 percent in 2013 to mark its best annual gain since 2009.

"Any pullback on the market will be brief and shallow. There's still quite a weight of money coming into the stock market," McLean said.

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