A daily look at the Markets from Joshua Raymond, Market Strategist, City Index.

The FTSE 100 and Dax powered to new 21 month and 18 month highs respectively on Thursday as US jobless claims declined and UK Retail Sales showed surprising strength in February.

Investors also grew more optimistic that a resolution to Greece’s debt troubles is nearing.

It has been a day of multiple good news stories both on a macro level and a corporate earnings front. This is along with rising optimism that the EU summit will result in a coordinated and definitive aid package to help Greece curb its massive deficit.

Investors have had lots of reasons to feel cheerful and buy stocks today.

If we do get a resolution on a Greek bail out proposal at the EU summit today, it will likely lift a timely heavy burden from the Euro that has been suffering much of late. It has fallen to new 10 month lows against the US Dollar.

Indeed, as anticipation of a bailout grew throughout the afternoon, we already started to see investors returning to buy the Euro and this may well continue if there is to be an agreement confirmed.

UK Retailers in Demand

Next and Kingfisher have both delighted the market with better than expected earnings.

Next saw profits rise 18% to £505m for the year, higher than the £500m anticipated.

Kingfisher also beat estimates to post a 49% rise in profit to £547m for the year. However, its shares came under pressure, bucking a stronger retail sector. Investors were left disappointed with a 5% increase in dividends to 5.5p. The market had hoped for 6.5p.

US Jobless Claims and UK Retail Sales Improve

The number of US workers filing for benefits hit fell sharply last week to 442,000, less than expected and hitting a new 18 month low.

UK Retail Sales also grew at a much faster pace than expected in February, with monthly sales growing 2.1% when a smaller 0.7% growth was predicted.

Both the Retail Sales and jobless claims have helped trigger demand for stocks today.

However, there does remain a rather large question mark on the medium to long term temperature of the UK high street, with likely government spending cuts, tax rises and more cost pressures on the consumer to come after the impending General Election.

This is likely to be when the high street will face its toughest test. Whilst the news from both Kingfisher and Next has delighted today, there remains much caution as to how retailers will perform in the next 12 months.

Thomas Cook

Shares in Europe’s second largest holiday firm Thomas Cook rose to the top of the FTSE 100 leader board after the travel company announced that summer holidays had picked up across all markets and were selling at 2% higher prices than last year.

This pleased investors and the travel sector as a whole, triggering strong demand for its shares.

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