FTSE 100 closed at a new record high on Tuesday as supermarkets bolstered the top tier index and Wall Street was back on the winning streak.
Britain's blue-chip benchmark closed up over 34 points at 7,731, while FTSE 250 finished over 18 points to the good, at 20,874.
David Madden, at CMC Markets, said: "The London market has been helped along by the supermarkets as Marks and Spencer, Sainsburys and Morrisons are in demand on the back of the report from Nielsen which stated all of the 'big four' had a positive Christmas period."
In the US, the Dow Jones is up over 120 points at 25,403 and the S&P 500 is up over 13 points at 2,756.
Madden summed it up thus: "It's the same old story on Wall Street whereby traders remain optimistic about the US economy on the back of the pro-business tax reforms that were approved last month. The momentum is clearly behind the bulls and it appears that more buyers are jumping on the bandwagon."
Top riser on Footsie was miner Anglo American plc (LON:AAL), but Sainsbury's plc (LON:SBRY) was in second place, up 3.07% to 248.40p. Marks and Spencer (LON:MKS) added 2.41% to 318.30p. Morrison's (LON:MRW) added 2.38% after results.
United Utilities Group PLC (LON:UU) shares lost 3.67% to 782.20p to be top laggard. Exane cut its target on the stock.
The FTSE 100 rose 29 points to 7,726 ahead of the closing bell as Morrisons led supermarket shares higher after impressing investors with its Christmas trading update.
"This once again leaves the UK index around the 7720 to 7730 mark, tantalisingly close to another record high - hopefully Sainsbury's Christmas update tomorrow will help the FTSE maintain the momentum it seems to have found today," said Connor Campbell, financial analyst at Spreadex.
A weaker pound against the dollar and the pound and a rally in commodity stocks also supported London's top tier-index.
Sterling fell 0.41% versus the dollar to US$1.3512 and dipped 0.04% versus the euro to ?,?1.1332.
"The dollar jumped to a fresh weekly high against a basket of major currencies on Tuesday amid market optimism over the US Federal Reserve raising interest rates at least twice in 2018," said Lukman Otunuga, research analyst at FXTM.
Across the Atlantic, US stocks were mixed with the Dow Jones Industrial Average up 68 points to 25,351 and the S&P 500 up 3 points to 2,750 but the Nasdaq down 1 point to 7,156.
What would Thomas the Tank Engine think?! Media reports said today that Virgin Trains and Daily Mail & General Trust PLC (LON:DGMT) are embroiled in a row after the rail company announced it had stopped selling the newspaper on its services because it was "not compatible" with its brand or beliefs.
Virgin Trains operates the west coast mainline, which includes trains from London to Manchester, Liverpool, Birmingham and Scotland.
A report in the Guardian online said The Daily Mail was one of a limited collection of newspapers and magazines that the train operator sold in its on-board shop and gave away to passengers in first class.
But in an internal memo, the Guardian site said Virgin Trains told staff that it would stop stocking the title, saying its employees had raised concerns "about the Mail's editorial position on issues such as immigration, LGBT rights and unemployment".
The report said the Daily Mail hit back at Virgin Trains, say it was "disgraceful" that the company had announced it was "censoring the choice of newspapers it offers to passengers" when the taxpayer was being forced to bail out Virgin's East Coast franchise.
Just Eat PLC (LON:JE.) was slightly weaker today, down 0.3% at 80.8p after reports said the takeaway food app is being criticised after introducing a 50p service charge on all its orders, bypassing a previous 50p surcharge on debit and credit card payments.
From Saturday 13 January, all card surcharges will be banned when a new European directive comes into force.
Critics say the move by Just Eat flies in the face of the new legislation, which was designed to save consumers up to ?473mln a year in card charges, according to the BBC.
The FTSE 100 index held firm but eased off highs in late afternoon trading as US stocks turned slightly mixed after hitting new record highs at the open.
Around 3.00pm, the UK blue chip index was ahead around 22 points at 7,718, below the session peak of 7,733.12.
After half an hour of trading on Wall Street, the Dow Jones Industrials recovered from yesterday's retreat to add about 46 points at 25,329, but the tech-laden Nasdaq composite fell back from an opening peak, losing 6 points at 7,152.
Craig Erlam, senior market analyst at Oanda noted: "Friday marks the unofficial start of earnings season and given the relative lack of notable economic events at the start of the week, it's not surprising to see little movement so far
"Equity markets in the US are trading at record highs and with high expectations for earnings season already baked in, there may be an element of caution among investors who will be eagerly anticipating the first batch of results."
Struggling burger chain Byron's is reportedly planning to shut stores in an effort to cut costs.
The company will launch a so-called company voluntary arrangement (CVA) on Wednesday, subject to the approval of creditors, Sky News reported.
Byron's needs to restructure its property interests to meet requirements for a fresh injection of cash into the business, agreed last month.
Oil prices have risen to new 2015 highs on optimism that production cuts led by OPEC will continue through 2018, reducing the global supply glut.
Brent crude is up 0.48% to US$68.11 per barrel and West Texas Intermediate is up 0.62% to US$62.12 per barrel.
"In view of sharply falling US crude oil stocks and record-high compliance with the production cuts by Opec, market participants are convinced that the market is continuing to tighten," said Carsten Fritsch, analyst at Commerzbank.
Brent Crude Oil hit $68 per barrel earlier today. It was $45 last July. pic.twitter.com/GvKfFV1jPr
- Douglas Fraser (@BBCDouglasF) 9 January 2018Lending support to US oil prices, weekly data from Baker Hughes on Friday showed the number of rigs drilling for new oil in the country fell to 742 from 742.
US stock futures pointed to a higher open with the Dow Jones on track to resume its record run that has seen it rise 27% over the past year.
Dow Jones Industrial Average futures rose 51 points to 25,301, S&P 500 futures gained 1.95 points to 2,748 and Nasdaq futures edged up 9.75 points to 6,697.
Alibaba Group is trading higher after the Chinese e-commerce firm's founder, Jack Ma, said he would consider a Hong Kong listing.
On the macro-economic data front, the NFIB's small business optimism index fell in December to 104.9 from 107.5 in November, missing forecasts of 108.0.
Later in the session sees the JOLTS job openings report while Federal Reserve official Neel Kashkari speaks.
The FTSE 100 increased 28 points to 7,725, driven by gains in retail stocks after Morrisons sales beat forecasts.
Morrisons shares edged higher after posting 2.8% growth in sales over the Christmas period.
"The battle between the bulls and the bears continues at Morrisons but it is the shareholders rather than the short-sellers who are raising a glass to the grocer's Christmas trading statement," said Russ Mould, AJ Bell investment director.
"Management left full-year earnings expectations unchanged, which will reassure many after the carnage seen in some retailers' share prices this month and also underpin analysts' forecasts of a steady recovery in the dividend payment.
"Bears are clearly yet to be convinced, however. According to the website www.shorttracker.co.uk, Morrisons is the seventh-most shorted stock in the UK, with some 11.5% of its shares on loan according to publicly declared positions."
Sector peer Marks & Spencer rose to the top of the FTSE 100 ahead of its own Christmas trading update on Thursday.
Fellow retailer Next continued to gain following last week's better-than-expected trading statement.
Micro Focus was on the front foot following declines yesterday when it issued a revenue warning.
In contrast, Severn Trent was the biggest faller after a downgrade by Exane
Centrica and United Utilities were also after Exane cut its target on the stocks.
Tesco slumped even after topping supermarkets in industry sales data for the festive season from Kantar World panel, as traders took profits ahead of a trading update later in the week.
The pound fell 0.25% versus the dollar to US$1.3534 but rose 0.07% against the euro to ?,?1.1345.
The Eurozone unemployment rate fell to 8.7% in November from 8.8% a month earlier, according to Eurostat.
It marks the lowest level since January 2009 when the eurozone was reeling from a deep recession after the financial crisis.
Euro area #Unemployment at 8.7% in November; lowest rate since Jan 2009. EU at 7.3% - lowest since Oct 2008 https://t.co/xKh4qxcRwW pic.twitter.com/yaH0ihYSX9
- EU_Eurostat (@EU_Eurostat) 9 January 2018ING expected the jobless rate to fall below 8% by the end of the year after hiring intentions published by the European Commission showed employment plans reached the highest level in 30 years.
"That said, there is still a wide divergence between the different member states with the unemployment rate in Germany currently at 3.6%, while it still stands at 16.7% in Spain and more than 20% in Greece."
"While falling unemployment should further boost consumption, thereby contributing to the self-sustaining character of the recovery, the key question for the ECB is when the unemployment level will start to affect wages. "
British American Tobacco shares rose 1.02% to 4,975p after saying the US tax reform would lift earnings per share by 6% in 2018.
Seven Trent shares dropped 1.6% to 2,095p after Exane cut its rating on the stock to 'underperform' from 'neutral'.
Mothercare rebounded from yesterday's decline when it issued a profit warning despite a downgrade by JPMorgan to 'underweight' from' neutral'. Shares rose 2.2% to 45.9p.
Tesco came out on top over the Christmas trading period with a 3.1% increase in sales in the 12 weeks to 31 December, industry data from Kantar Worldpanel revealed.
Asda, owned by Walmart, saw sales rise 2.2% over the period while Morrisons sales grew 2.1% and Sainsbury's sales climbed 2.0%.
Discounters Adli and Lidl continue to outpace the four biggest supermarkets with both delivering a 16.8% increase in sales.
"Overall supermarket sales increased in value by 3.8 percent, with an additional 1 billion pounds ringing through the tills compared to the same festive period last year," said Fraser McKevitt, Kantar Worldpanel's head of retail and consumer insight.
"Shoppers parted with 747 million pounds on Dec. 22 alone, making the Friday before Christmas the busiest shopping day ever recorded."
Shares in Tesco were little changed while shares in Sainsbury and Morrrisons grew after the latter reported a better-than-expected Christmas trading update.
London stocks opened higher with supermarket stocks leading the charge after a well-received trading update from WM Morrison Supermarkets.
The FTSE 100 rose 26 points to 7,723 at 8.20am.
Morrisons was the top riser on the FTSE 100 after reporting a 2.8% increase in like-for-like sales in the 10 weeks to 7 January. A positive-read across gave other supermarket stocks a boost including Sainsbury and Tesco, which report their own Christmas trading updates later in the week.
Morrisons figures look pretty impressive - lfl sales +2.8% in 10 weeks to Jan 7th, Christmas period (6 weeks to Jan 7th) +3.7%
- Neil Wilson (@neilwilson_etx) 9 January 2018Housebuilders, including Persimmon and Barratt Developments, reversed the previous day's declines when Halifax revealed an unexpected drop in UK house prices in December.
Shire shares continued to slide after cutting its revenue guidance and saying it plans to separate its rare disease and hyperactivity medicines businesses before deciding later this year whether to spin off the latter into a separately listed group.
In economic data, the British Retail Consortium said UK like-for-like retail sales rose 0.6% in the 26 November to 30 December, beating forecasts for a 0.3% increase.
Overall spending in the last three months of 2017 rose 1.1%, compared to an average annual growth rate of 1.7% for 2017 as a whole.
Ortac Resources PLC (LON:OTC) has reported further significant new gold assay results taken from the expansion and infill drill programme currently underway at Akyanga.
Shares in Strategic Minerals PLC (LON:SML) shot up in early deals after the miner said its Cobre operations achieved record sales in the fourth quarter. The shares, which closed at 2.10p last night, rose as high as 2.34p as Strategic Minerals said it achieved sales of US$2.14mln during the final quarter of 2017, up from US$2.04mln in the preceding quarter.
Cancer immunotherapy specialist Scancell Holdings PLC (LON:SCLP) has entered into a research collaboration agreement with European biopharma BioNTech as the two look to develop innovative T cell therapies for the treatment of cancer.
Midatech Pharma PLC (LON:MTPH, NASDAQ:MTP) said it had been given the green light by Polish regulators for an EU first-in-human study for Q-Octreotide, also known as MTD201. It has been provided verbal confirmation; formal written approval is expected within the next two weeks.
SDX Energy Inc (LON:SDX, CVE:SDX) told investors that it has now put the KSR-16 well, at the Sebou project onshore Morocco, into production. The well yielded a restricted production rate of 8.43mln cubic feet of gas per day, which is the best result of the three recent new wells at the project.
Allergy Therapeutics PLC (LON:AGY) has completed the recruitment to a European Phase III clinical trial of its ultra-short course treatment for people allergic to birch pollen. Results from the study of PQ Birch are expected in the second half of this year. Researchers will assess the efficacy of the aluminium-free inoculation alongside the safety of the injection.
Waste-to-energy company Powerhouse Energy Group PLC (LON:PHE) said in its full-year business update that its Distributed Modular Gasification system continues to generate significant interest from potential partners.
Coinsilium Group Limited (NEX:COIN) told investors that it has increased its shareholding in Indorse, a block chain-powered social network for professionals. It is paying just under ?100,000 to acquire a 3.5% stake, which will increase its shareholding to 6.5%, and under the terms of an option deal, the company can acquire a further 3.5% to increase the stake to 10%.
Independent analysis of its 2017 drill programme has confirmed an increase of 180% in the length of the mineralised trend at Amur Minerals Group PLC's (LON:AMC) Kun-Maine nickel project.
The Footsie is seen starting higher this morning, recovering after yesterday's retreat from record highs despite mixed showings overnight from US and Asian stocks, lifted by commodity price gains.
Spread betting firm CMC Markets expects the FTSE 100 index to open up around 11 points at 7,707, having shed 27.71 points on Monday after hitting a new all-time peak of 7,733.39 early in the session.
Overnight on Wall Street, the Dow Jones Industrial Average edged 12 points lower after the best start to the year in a decade as investors turned slightly cautious ahead of the upcoming earnings season.
But Asian stocks were higher, approaching record highs, with Japanese stocks up 0.5% although gains were pared after the Yen surged ahead on news the Bank of Japan is to trim its bond buying, indicating a return to a more normal monetary policy.
Elsewhere on currency markets, sterling was flat both the dollar and the euro after UK prime minister Theresa May's cabinet reshuffle yesterday failed to excite.
In absence of any official UK economic data today, two surveys released overnight showed the problems impacting the economy. A recruitment survey showed UK firms hiring staff at the fastest rate in four months; but another by the British Retail Consortium showed retailers report the biggest fall in non-food sales since 2009.
Food retail will be the order of the day on the corporate front as the first Christmas trading statement from the 'Big Four' supermarket groups arrives, with Wm Morrison Supermarkets PLC (LON:MRW) due to report today.
The UK's major food retail chains have all been grappling with tough competition from discounters Aldi and Lidl, higher cost inflation and weaker consumer confidence, and Morrisons is expected to reveal a slowdown in retail like-for-like (LFL) sales growth in the 10 weeks to 7 January, which makes up the bulk of its fourth quarter.
Deutsche Bank predicts a 1.0% increase in Morrison's like-for-like sales over the period, compared to a 2.1% rise in the third quarter.
"Morrisons have a very tough comparative to cycle from last year," the bank's analysts said, "However, despite potentially disappointing sales at Morrisons, we expect consensus profit expectations to remain resilient."
Aside from the retail trading statement deluge, a trio of blue chip housebuilders will also provide updates in the coming data, kicking off with Persimmon PLC (LON:PSN) on Tuesday.
The FTSE 100-listed firm last updated the market in early November 2017 stating that consumer demand had remained strong with all lead indicators remaining positive.
However, the statement disappointed due to the circa 10% fall in active sales outlets due to some planning delays and also a desire to accelerate build production on certain sites.
In a preview, analysts at Numis Securities said they see two foci for the latest update - has Persimmon managed to grow outlet numbers since the last update, and have forward orders for 2018 delivery advanced from the +10% year-on-year levels reported in November particularly in light of the Budget stamp duty cut for first time buyers?
The analysts said they would hope for low single digit growth in average outlets for 2018, and they think Persimmon remains a strong operator and is achieving levels of balance sheet efficiency and margins not seen elsewhere in the sector.
However, they think that this is captured in Persimmon's current rating, and, furthermore, the exceptionally high level of management remuneration is likely to cast a shadow over the shares through 2018 and could also create problems with senior management retention.
Trading updates: Wm Morrison Supermarkets PLC (LON:MRW), Joules Group PLC (LON:JOUL); Persimmon PLC (LON:PSN); Robert Walters PLC (LON:RWA), SIG PLC (LON:SHI), Topps Tiles PLC (LON:TPT), Majestic Wine PLC (LON:MJW), Carr's Group PLC (LON:CARR), Ferrexpo PLC (LON:FXPO)
Interims: Games Workshop PLC (LON:GAW), Ilka PLC (LON:IKA), Stock Spirits Group PLC (LON:STCK)
Finals: Elegant Hotels PLC (LON:EHG); Nexus Infrastructure PLC (LON:NEXS); Safestore Holdings PLC (LON:SAFE)