Record high for buoyant Next shares

Next shares have soared to an all-time high after the fashion retailer said significantly better-than-expected Christmas trading meant it was hiking its profit forecast.

1151bb6c-7458-11e3-8d7a-0a0c0223000020140105T122122
Next joined the list of Christmas winners so far after reporting surging sales and upping its profits forecast.

Next shares have soared to an all-time high after the fashion retailer said significantly better-than-expected Christmas trading meant it was hiking its profit forecast.

The group climbed 10% after it said full-year earnings could now rise by as much as 12.6% - sparking further gains among rivals such as Marks & Spencer and Primark parent Associated British Foods.

The retail rally helped prop up the wider FTSE 100 Index, which initially fell into the red after succumbing to profit-taking and fears over data showing slowing factory activity in China, before later recovering to close 12.8 points up at 6730.7.

France's Cac 40 and Germany's Dax were also up as they rebounded from heavy falls in the previous session.

It came after markets suffered a lacklustre start to 2014, with a fall in the FTSE 100 marking the first time since 2008 that new year trading had kicked off in the red.

In New York, the Dow Jones Industrial Average also fell on Thursday and while nudging into positive territory in the latest session, struggled for direction ahead of a speech later from outgoing US Federal Reserve chairman Ben Bernanke.

On currency markets, sterling was flat at 1.64 US dollars and 1.21 euros.

In London, Next was the biggest riser on the FTSE 100, up 555p to 6085p, after its buoyant update ensured it joined John Lewis and House of Fraser on the list of Christmas retail winners so far.

Sales across Next stores leapt 7.7% higher between November 1 and Christmas Eve, while revenues surged by 21% in the Next Directory catalogue and online division.

It also cheered investors by announcing a £75 million special dividend payout worth 50p a share and plans to return a further £300 million to shareholders over the year ahead.

M&S followed it on the risers board with a 16.7p gain to 444p as investors were more hopeful over its trading update next week after the flurry of stellar sales updates.

It had been hit hard earlier in the week after rival Debenhams issued a major profits warning following disappointing Christmas sales.

Primark parent Associated British Foods was also making gains, up 36p to 2524p, while in the FTSE 250 Currys and PC World group Dixons Retail rose 5%, or 2.5p, to 50p.

Debenhams also continued to claw back some of Tuesday's heavy falls and was up 4%, or 3p, to 78.1p.

Housebuilders were likewise making advances after Nationwide data revealed prices surged by 8.4% over 2013, with property values rising by 1.4% month-on-month in December.

Crest Nicholson rose nearly 3%, or 9.9p, to 380p, while Bovis Homes was up 19.5p to 821p and Redrow climbed 10.5p to 457.5p.

The biggest FTSE 100 risers were Next, up 555p to 6085p, Marks & Spencer up 16.7p to 444p, CRH up 41p to 1580p, and Hargreaves Lansdown up 36p to 1441p.

The biggest FTSE 100 fallers were Coca-Cola HBC down 36p to 1725p, Mondi down 19p to 1026p, Pearson down 22p to 1318p and Glencore Xstrata down 3p to 307.5p.