6th Jan 2026 12:00
(Alliance News) - Stock prices in London were higher at midday on Tuesday, as the FTSE 100 extended its rally after the first festive data for retailers was well received by investors.
The FTSE 100 index was up 68.51 points, 0.7%, at 10,072.08. The FTSE 250 was down 12.70 points, 0.1%, at 22,581.23, and the AIM All-Share was up 0.26 points at 775.11.
The FTSE 100 reached a new intraday record of 10,077.94 after reaching a record closing peak of 10,004.57 on Monday.
The Cboe UK 100 was up 0.7% at 1,010.06, the Cboe UK 250 was up 0.1% at 19,657.18, and the Cboe Small Companies was up 0.1% at 17,980.87.
In European equities on Tuesday, the CAC 40 in Paris was down 0.4%, while the DAX 40 in Frankfurt was up 0.2%.
Sterling was at USD1.3523 at midday on Tuesday, up from USD1.3516 at the London equities close on Monday. The euro was lower at USD1.1708 from USD1.1713. Against the yen, the dollar was slightly higher at JPY156.44 versus JPY156.41.
"The FTSE 100 extended its New Year rally... as bank and oil companies were in demand," said AJ Bell analyst Russ Mould.
Growth in the UK service sector improved slightly in December, purchasing managers' index survey results from S&P Global showed.
The S&P Global UK services PMI business activity index edged higher to 51.4 points in December from 51.3 in November, but underperformed against the flash reading of 52.1.
The reading remained above the neutral 50-point mark separating growth from contraction, and indicated a rise in business activity for the eighth successive month.
The seasonally adjusted S&P Global UK composite PMI output index, a blend of the service and manufacturing sector readings, rose to 51.4 points in December from 51.2 in November to remain in expansion territory for the eight month in a row. However, it missed the flash estimate of 52.1 points.
"Lacklustre business activity growth continued across the UK service sector at the end of 2025," said Tim Moore, economics director at S&P Global Market Intelligence. "Moreover, the speed of expansion was softer than signalled by the earlier 'flash' survey in December and lower than seen on average in the second half of the year."
He added that survey respondents "noted sales headwinds linked to weak UK economic prospects, alongside challenging operating conditions due to factors such as sharply rising business costs and soft demand in major overseas markets."
Stocks in New York were called to open mixed. The Dow Jones Industrial Average was called down 0.2%, the S&P 500 index 0.1% lower, and the Nasdaq Composite up 0.1%.
The yield on the 10-year US Treasury was at 4.18% at midday on Tuesday, widened slightly from 4.17% on Monday. The yield on the 30-year was at 4.87%, widened from 4.86%.
In the UK, the festive month saw a record GBP13.8 billion in take-home grocery sales – up 3.8% year on year – with 92% of shoppers indulging in premium own-label products and sales of the lines exceeding GBP1 billion for the first time, according to market research firm Worldpanel by Numerator, formerly Kantar.
Fraser McKevitt, head of retail and consumer insight at Worldpanel, said: "It was a Christmas of smart savings and considered choices – almost every household bought into supermarkets' premium ranges, while price remained front of mind.
"Discounters enjoyed their biggest-ever Christmas share, and shoppers leaned on their loyalty cards to get the best deals."
Ocado Retail, a joint venture of Ocado Group PLC and Marks & Spencer Group PLC, was once again the fastest growing UK grocer, with sales increasing by 15% over the 12 weeks to December 28 compared to the same period a year ago, and accounting for 2.1% of the market.
Shares in Ocado were up 7.4%, the most on the FTSE 250 index.
J Sainsbury's shares were up 2.4% as its market share in December reached 16.3%, up from 16% last year.
Tesco's sales were 4.3% higher than in 2024 to take a market share of 28.7%. Shares in Tesco rose 2.4%.
Meanwhile, Next shares climbed 3.2% as it said UK sales and growth in its international business surpassed expectations, as it lifted profit guidance for the fifth time this financial year.
The Leicester, England-based clothing and homeware retailer said full-price sales were up 11% in the nine weeks that ended December 27 compared to last year, ahead of guidance for annual growth of 7.0%.
Next said this "over-achievement", along with additional sales forecast in January, adds GBP51 million to full price sales for the full-year.
As a result, the FTSE 100 listing raised guidance for financial 2026 pretax profit by GBP15 million to GBP1.15 billion. This would be growth of 14% from GBP1.01 billion in financial 2025.
It is the fifth time Next has increased profit guidance in the current financial year, after upward revisions in trading updates in March, May, July, October last year.
AJ Bell analyst Russ Mould said: "Next impressed with its Christmas trading update. That was bad news for Marks & Spencer as it lost clothing business to Next last year during months of cyberattack disruption. Investors appear to have concluded that Next’s success means further weakness for M&S."
Marks & Spencer shares were up 0.2%.
Shares in JD Sports Fashion were 6.0% lower, the largest decline on the FTSE 100 index, as Bank of America raised concerns that the current down cycle in sports retailing could be part of a longer-term sector trend.
The bank lowered Bury, Manchester-based JD Sports Fashion to 'neutral' from 'buy' and cut its price target to 96 pence from 112p.
BofA cut organic sales growth for JD Sports by 50 basis points to 4% from more than 4% previously, starting in 2028.
The broker no longer expects the Ebit margin to rise from 8% currently to over 9% by 2034: instead, it expects it to remain around 8%, in line with the group's long-term average and median levels.
On the FTSE 250 index, SSP Group dropped 4.1% after Barclays cut its rating on the London-based operator of food and beverage outlets in travel locations to 'equal weight' from 'overweight'.
On the AIM market, Cadence Minerals jumped 17%.
The investment and development firm received a preliminary environmental licence for the Amapa mine iron ore project in Brazil.
It said the licence confirms environmental feasibility for the full mine capacity. The approval covers the entire mine development envelope, Cadence added, including the Azteca processing plant.
The firm said this is a "material de-risking event" that establishes a clear regulatory pathway toward construction and production.
"This is a highly significant regulatory milestone for Amapa. The grant of the preliminary licence confirms environmental acceptance of the mine at its full intended scale and marks a decisive step forward in the project's redevelopment," said Chief Executive Officer Kiran Morzaria.
Gold was up at USD4,460.70 an ounce at midday on Tuesday from USD4,441.79 late Monday. Brent oil was trading slightly higher at USD62.03 a barrel from USD61.63.
Still to come on Tuesday's economic calendar is the composite PMI reading for the US, due at 1445 GMT.
By Michael Hennessey, Alliance News reporter
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