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Wednesday
Apr062011

FTSE up as M&S leads retail surge. 

The FTSE 100 Index has pushed closer to a six-week high after retail stocks surged following a better-than-expected update from bellwether Marks & Spencer.

M&S was the Footsie's biggest riser, up 7%, after it said sales rose 0.1% in its fourth quarter, while other retailers such as Next and B&Q-owner Kingfisher also benefited.

The Footsie was up 40.5 points to 6047.6 after it was boosted by a strong opening from the Dow Jones Industrial Average.

The US market was cheered by notes from the latest meeting of the Federal Reserve which showed there is little chance of it making any changes to its monetary stimulus programme.

Back in London, the FTSE 100 was also lifted by strong performances from miners and banks but M&S remained the biggest story of the day. Shares were up 22.5p to 362.8p after figures bettered analysts' expectations for a sales decline of 2.5%.

Chief executive Marc Bolland said he did not believe the retail environment had "hit a wall or fallen off a cliff" despite a poor run of form for many on the high street. Next was up 69.5p to 2100.5p, and Kingfisher rose 6.1p to 264.1p as investors began to view the sector more positively following recent falls.

The Footsie shrugged off a report by the Office for National Statistics which showed that UK industrial production suffered its biggest fall in 18 months in February, fuelling uncertainty over the state of the economic recovery.

Industrial production, which includes sectors such as mining and energy supply, dropped 1.2% month-on-month in February, while manufacturing output was flat.

But banks were resurgent despite ongoing fears over Portugal's debt crisis - Lloyds Banking Group was the second highest riser after press reports that the Independent Commission on Banking (ICB) is unlikely to suggest that it should reverse the HBOS takeover in order to create more competition in the market. Shares were up 4%, or 2.5p to 62.2p.

Barclays also benefited after Canaccord Genuity upgraded it from hold to buy and said the stock was undervalued by speculation before the ICB's report on Monday. HSBC was another top riser after JP Morgan advised investors to buy the stock before the bank holds an investor day in May.

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    FTSE up as M&S leads retail surge. - Tax, Legal & Business News from London - St Matthew Accountants London
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    FTSE up as M&S leads retail surge. - Tax, Legal & Business News from London - St Matthew Accountants London
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    FTSE up as M&S leads retail surge. - Tax, Legal & Business News from London - St Matthew Accountants London
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    FTSE up as M&S leads retail surge. - Tax, Legal & Business News from London - St Matthew Accountants London

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