FTSE rises to record as retailers advance

By Alistair Smout and Francesco Canepa

LONDON (Reuters) - Britain's top share index reached a record high on Wednesday, helped by gains for domestic retailers such as Next, Dixons Carphone and Sports Direct.

Dixons Carphone, the electricals and mobile phone retailer, was up 2 percent after German mobile telephone company Drillisch agreed to buy the UK company's chain of telecoms shops, The Phone House Deutschland, for a combination of shares and future cash flows.

Fashion chain Next rose 2.5 percent after JPMorgan upgraded the shares to "overweight" from "neutral" ahead of the company's update on April 29.

The FTSE 100 closed up 21.52 points, or 0.3 percent, at 7,096.78 points, after rising to a new high at 7,111.72 points.

"The search for a good, secure income remains one of the biggest themes for investors globally – on that basis, UK FTSE 100 equities yielding prospectively 4 percent looks pretty good value," said William Meadon, a fund manager at JPMorgan Claverhouse Investment Trust who holds both Dixons Carphone and Next.

"Strategically, we remain bullish on the internationally exposed FTSE ... we are, however, tactically more cautious ahead of an uncertain general election on May 7."

The index's rally has so far been largely unaffected by the U.K. election, in which no party is expected to win an outright majority.

Domestically exposed stocks have outperformed the FTSE's more international names so far this year, although investors are becoming more cautious on the British economy's outlook. ( http://link.reuters.com/gef44w )

Continuing that trend, British sports retailer JD Sports Fashion rose 5.8 percent, a top mid-cap riser, after posting a 22 percent rise in full-year profit as demand for branded sports shoes in the UK and Europe helped sales soar.

Blue-chip peer Sports Direct rose 3.8 percent.

"The update from JD Sports is good for the sector, and Sports Direct is seeing follow-through from those good numbers," Mark Priest, sales trader at ETX Capital, said.

"The sports sector is cleaning up at the moment, and the economy in Britain is rosier than it was. That could all change after the election in a few weeks though."

(Editing by Larry King)