* FTSE 100 up 0.2 pct
* More bullish mood supports gains
* Retail sales data surprises, boosts sterling
* Next shines after trading update
* IG drops, analysts point to regulatory worries
By Helen Reid
LONDON, March 23 British shares turned up on
Thursday after a two-day losing streak as markets turned more
bullish and retail sales data indicated more robust consumption.
The blue-chip FTSE 100 index rose 0.2 percent but
underperformed the broader European market, up 0.9 percent, as
the stronger pound held back its constituents whose earnings are
mainly in foreign currencies.
Sterling hit a one-month high after British retail sales for
February beat all economists' expectations in a Reuters poll,
rising by 1.4 percent from January, though the figure for the
quarter was in decline.
Retailers were among top sectoral gainers. Clothing retailer
Next was up 8.6 percent and the top FTSE gainer in heavy
volume, posting its best gains in nine months after it
maintained its guidance for 2017-18 from January when it issued
a surprise profit warning.
Peer M&S was also a top gainer, up 3.7 percent.
The mid-cap index was up 0.9 percent. Results drove
big moves in individual stocks.
Safety and medical company Halma was Europe's
second biggest gainer, up 6.5 percent after it posted strong
orders growth. Its shares had their biggest one-day gain since
Investec analysts said the results were good enough to see a
re-rating of the stock, which has suffered as investors rotated
Analysts at Liberum, however, saw it being further
pressured: "Halma remains at an elevated premium to the sector
... despite a wobble in the Trump rally in recent days, we
believe reflation is a multi-year cycle and see further
compression of Halma's defensive premium."
Shares in online gambling company GVC rose 5.4
percent in heavy volume, among top Europe-wide gainers, after
the firm said it would pay a second special dividend for 2016 on
the back of strong trading.
Online trading company IG Group however was down 5
percent, a top faller after posting a 3.8 percent drop in
IG said regulatory uncertainty had had no impact on its
business so far. Britain's financial watchdog, the FCA, has
sought to tighten controls on the spread-betting market.
"We continue to see the outcome of the FCA's consultation as
the biggest risk to IG," said analysts at Liberum. "In the
absence of any clarity about what new regulation looks like, the
business is impossible to forecast at this stage and therefore
we maintain our 'unrated' rating."
Dixons Carphone was also among top mid-cap gainers.
The stock joined the FTSE 250 on Monday after being
demoted from the blue-chip index.
Demoted stocks tend to see increased trading in the days
after transitioning as passive index-tracking funds modify their
positions to adapt to new constituents.
($1 = 0.7996 pounds)
(Editing by Catherine Evans)