FTSE 100 close: Citigroup boost for retailers
The FTSE 100 index advanced today despite Chancellor Alistair Darling's gloomy predictions of soaring borrowing and the worst year for the UK economy since the Second World War.
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A 3.5% decline this year will be followed by better-than-expected growth of 1.25% in 2010, Mr Darling said, but markets were focussing on comments from his US counterpart Tim Geithner.
The Treasury Secretary's comments that banks had more than enough capital and his confidence over an eventual recovery helped the Footsie finish 43.2 points higher at 4,030.7 as Wall Street also turned around early losses.
The Dow Jones was last 54.9 points ahead at 8,024.4.
His comments helped top-flight banking stocks, while retail shares advanced after a leading City firm upgraded its price targets in the sector amid hopes of improved trading.
Next rallied more than 7%, or 98p to 1435p to surge up the leaders' board while B&Q owner Kingfisher saw similar gains, finishing 12.1p up at 174.8p. Marks & Spencer cheered 17.75p to 329.25p.
In the FTSE 250 index, Comet owner Kesa Electricals and Currys firm DSG International improved 10.75p to 122.5p and 3.5p to 35.75p respectively.
More gloom from unemployment and public sector borrowing figures earlier in the session failed to derail the market, given that the figures were broadly in line with expectations.
Analysts also took first-quarter figures from GlaxoSmithKline in their stride, even though the results were slightly lower than expectations. Shares were 31.5p lower at 1019.5p, a drop of 3%.
Banks were the main beneficiaries of improved sentiment on Wall Street, with Barclays up almost 10% or 19p to 218p and Lloyds Banking Group ahead 5.5p to 100.5p. Elsewhere HSBC gained 19.25p to 469.5p, or 4%.
Back in the second tier, investors were monitoring ITV shares amid rumours that Italy's Mediaset is working on a bid for the broadcaster. ITV shares jumped 11% or 3.25p to 32p, even though network partner STV said there had been no improvement in advertising conditions. STV shares were down 7% or 5.25p at 74.75p.
And in the retail sector, Game Group surged almost 13% - up 21p to 185p - as investors cheered better than expected annual results and a strong start to the new financial year.
There was also good news from chocolate retailer Thorntons, which lifted 10% or 8.25p to 87.25p after it said it expected profits to beat market forecasts following a strong Easter trading period.
Fashion group Alexon proved the exception in the sector after it reported bottom-line losses of £27.7m and said its loss-making arm Bay Trading may need radical restructuring if trading does not improve. Shares were down 21%, off 7p at 26.25p.
The biggest Footsie risers were Hammerson up 31.5p at 310p, Barclays up 19p at 218p, British Land up 38.75p at 446p and Rio Tinto up 177p at 2472p.
The biggest Footsie fallers were Centrica down 11p at 235p, Friends Provident off 2.8p at 60.8p, Reed Elsevier down 20.25p at 478.75p and Cadbury down 18p at 496.5p.
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