UK stocks climb on energy boost; retailer Next at record peak

British equities started 2024 on a sombre note after the benchmark index managed to eke out some gains last year, although concerns over the UK's economic growth and rising interest rates lingered. Energy shares climbed 0.8% on Thursday to hit their highest levels in more than six weeks after oil prices extended gains on persisting concerns over Middle Eastern supply disruptions.

London stocks rose on Thursday, supported by energy shares that tracked oil prices higher, while Next jumped to a record peak as the British clothing retailer raised its annual profit outlook.

The blue-chip FTSE 100 was up 0.2%, recovering from two straight days of losses. The midcap FTSE 250 index also climbed 0.2%. British equities started 2024 on a sombre note after the benchmark index managed to eke out some gains last year, although concerns over the UK's economic growth and rising interest rates lingered.

Energy shares climbed 0.8% on Thursday to hit their highest levels in more than six weeks after oil prices extended gains on persisting concerns over Middle Eastern supply disruptions. Next was the top gainer in the FTSE 100, jumping 4.8% to an all-time high after the retailer raised its profit forecast for the year ended January 2024, for the fifth time in eight months.

"Unwrapping some of the headline figures, the group's revenue growth came largely from its online channel where sales grew at near double-digit rates. Next still has a strong high street presence too, and growth here remains positive," said Aarin Chiekrie, equity analyst at Hargreaves Lansdown. JD Sports Fashion dropped 22.2% to a one-year low after the sportswear retailer lowered its full-year profit forecast, citing higher costs, a slowdown in consumer spending and subdued demand for apparel amid milder weather conditions.

JD's profit warning pulled the retail sector down by 1.4%, dropping to a five-week low. British companies are a bit optimistic about sales growth this year after a largely flat 2023, but remain wary about increasing investment, according to a survey published on Wednesday.

Traders will now shift their focus to S&P Global's composite Purchasing Managers' Index figures, and mortgage approvals data later in the day for more clues on the strength of the British economy.