LONDON (Reuters) - The UK’s top share index came within a whisker of a record high on Tuesday as Morrisons led a buoyant retail sector on the back of a well-received Christmas trading update.
Britain's blue chip FTSE 100 .FTSE index was up 0.3 percent at 7,720.19 points by 0955 GMT, while mid caps gained 0.1 percent.
Shares in Morrisons (MRW.L) were among the best performers on the FTSE, up 2.6 percent after the supermarket chain beat sales expectations in the all-important Christmas trading period.
“The Morrisons update is clearly better than expected,” said Mike van Dulken, head of research at Accendo Markets.
“Marks has got the double benefit of both food and clothing and houseware. Next gave a good update from the clothing and the houseware section, Morrisons is giving a good update for the grocery, so perhaps Marks can benefit twofold there,” van Dulken added, referring to Next’s upbeat Christmas update last week.
Sainsbury, Tesco (TSCO.L) and Marks & Spencer are all due to give updates on Christmas trading this week.
Industry figures showed that shoppers feeling the pinch from inflation scaled back on almost everything except for food in the last three months of 2017.
This has led to the biggest fall in non-grocery spending since 2009.
“Food sales have managed to shrug off the consumer slowdown, after all, eating three meals a day is more important than having the very latest iPhone,” Laith Khalaf, senior analyst at Hargreaves Lansdown, said in a note.
Elsewhere, shares in Persimmon (PSN.L) declined 1.6 percent after its trading update, with the housebuilder saying that it was hoping to achieve a modest increase in sales this year.
Shares in Micro Focus (MCRO.L), which dropped nearly 17 percent in the previous session thanks to a weak set of results and disappointing outlook, recovered slightly and were up 1.8 percent.
Analysts at Barclays said that the fall in Micro Focus was so harsh it was hard to justify.
“We would look through the volatility in trading and use this as an opportunity,” they said in a note.
(Graphic for UK grocers share price performance, click reut.rs/2De8DQZ)
Reporting by Kit Rees; Editing by Kevin Liffey