Investors in festive spirit as European stocks jump thanks to retail boost

European markets enjoyed a boost on Wednesday as investors flocked to cash in on retail stocks ahead of the post-Christmas sales.

Retail giant JD Sports saw its share price jump by more than 6% while Frasers Group and Next shot towards the top of London’s leading index, helping to lift it higher.

A strong performance for US sportswear chain Nike gave the retail sector a boost overseas, analysts said, with investors hopeful that demand for athleisure clothing is more resilient than expected.

The FTSE 100 closed 126.7 points higher, or 1.72%, at 7,497.32p.

The positive mood comes despite new official figures showing that UK Government borrowing surged to the highest monthly figure for November since records began in 1993.

Borrowing was driven up by higher interest rates and the package of cost-of-living support for households, totalling £22 billion last month, up from £13.9 billion in the same period last year.

But the higher-than-expected figures did not appear to deter investors, with stocks across Europe and US performing well on Wednesday.

Chris Beauchamp, chief market analyst at online trading platform IG, said: “A marginally more festive atmosphere prevails across stock markets this afternoon, with Christmas now very much within sight for most investors.

“This Santa rally has been long-expected, and eagerly awaited, but kept being delayed by central banks, inflation data and other road bumps that have prevented any meaningful bounce developing for most of the month so far.

“Perhaps, with so little on the agenda before Christmas Day, markets finally have scope for a decent rally to round off such a difficult year.”

Elsewhere in Europe, the French Cac jumped by 1.98% and the German Dax was 1.49% higher.

It was also a strong start to trading across the pond, with the US S&P 500 up 1.38% and Dow Jones up 1.53%.

Oil prices also saw a big leap, with Brent crude oil jumping 2.43% to 81.96 US dollars per barrel.

However, the pound weakened following the official debt figures, dropping by 0.8% against the US dollar to 1.2086 and 0.6% against the euro to 1.1394 when European markets closed.

In company news, shares in struggling Cineworld dropped further after rival cinema chain Odeon owner AMC Entertainment pulled out of talks to buy the company.

It said negotiations would not be continuing after revealing it had been in talks with lenders to rescue the bankrupt chain.

Shares in Cineworld slipped by 5.26%, having already plunged by more than 80% over the past six months.

Elsewhere, shares in specialist distributor Bunzl also slipped despite the FTSE 100-listed firm telling shareholders it is set to see its total revenues rise by around 17% in 2022.

The company said it was seeing a boost in demand for its cheaper products as firms seek value amid cost pressures.

Nevertheless, shares in Bunzl were down by 0.96%, enough to mean the group hit the bottom of the FTSE 100 on Wednesday.

The biggest risers on the FTSE 100 were JD Sports Fashion, up 6.9p to 120.15p, Ocado Group, up 30p to 651.6p, Anglo American, up 125.5p to 3,249.5p, Persimmon, up 43p to 1,239p, and St James’s Place, up 35.5p to 1,108.5p.

The biggest fallers on the FTSE 100 were Bunzl, down 27p to 2,793p, and Halma, down 8p to 2,048p.