FTSE Close: Essar, Fresnillo up; TUI, ARM down

 

17.05 (close)

People walk past London's Stock Exchange

Taking stock: Investors may hold back after gains yesterday.

The FTSE 100 Index held its head above water today after a shaky session complicated by mixed economic data across the world.

Strong US retail figures, sticky UK inflation rates and weak European industrial production fluctuated the markets, which were still riding a wave of optimism triggered by yesterday's positive data from China and Basel.

The FTSE 100 Index closed just under 2 points up at 5567, after losses earlier in the session, while Wall Street's Dow Jones Industrial Average continued to progress, up 0.2%.

In the US, the Commerce department said retail sales rose 0.4% last month - the largest rise in five months. But any optimism generated by this data was offset by news that European industrial production unexpectedly stagnated in July.

In the UK, the Footsie bounced in and out of the red after the Office for National Statistics said the Consumer Prices Index held at 3.1% in August, still well above the Bank of England's 2% target.

The update gave an initial lift to the pound, which was up against the dollar and euro at 1.55 and 1.19 respectively, amid expectations that it could advance the date when interest rates have to rise.

But all markets were still feeling the positive impact of Monday's upbeat industrial production reports from China and the Basel banking reforms.

The resources sector continued to show the benefit with Essar Energy soaring to the top of the FTSE 100 Index, up nearly 4% or 16p at 464p, while silver miner Fresnillo was also up 2p to 1162p.

There was also a gain of 2% for Cable & Wireless Worldwide after the telecoms firm signed a contract worth £82m with the Foreign and Commonwealth Office.

The deal, which prompted a rise of 2.6p to 73.9p for C&W, was viewed positively for other outsourcing firms as the government looks to spend money on cost-saving projects. Other risers included Capita, which lifted 21.5p to 770.5p.

On the fallers board, TUI Travel dropped nearly 2% after Bank of America Merrill Lynch downgraded the tour operator to neutral from buy. Shares responded with a fall of 4.1p to 221.8p.

Retailers suffered after the stubbornly high inflation figures were published, and following a warning from Debenhams over higher input costs.

Next, which is due to publish half-year figures on Wednesday, fell 43p to 2040p, Argos owner Home Retail Group dropped 3.3p to 212.4p and Primark firm Associated British Foods dipped 9p to 1063p.

Despite the cost uncertainty, department store chain Debenhams made it on to the FTSE 250 Index risers board after forecasting a 20% rise in full-year profits to about £150m.

It also reported a recovery in like-for-like sales during the last 10 weeks of the year, albeit against weaker comparatives. The news encouraged investors as shares lifted 2.2p to 67.2p.

Elsewhere in the retail sector, Superdry fashion firm SuperGroup slipped 4% after the release of first quarter figures showing a 60% jump in sales.

One analyst described the update as "outstanding" but shares lost 42p to 1107p having more than doubled since flotation in March.

The biggest Footsie risers were Essar Energy, up 16.7p to 464p, Capita Group, ahead 21.5p to 770.5p, Randgold Resources, up 170p to 6290p, and Petrofac, ahead 38p to 1410p.

The biggest fallers were ARM holdings, down 16p to 389p, Next, off 43p to 2040p, Rolls-Royce Group, down 11p to 584p, and TUI Travel, off 4.1p to 221.8p.

16.00: With the close in sight, the Footsie is pushing hard to stay in positive territory.

The FTSE 100 is now just 1.92 points down at 5563.61. Any gains today would set a new four-month high.

14.40:

In the US, the Dow Jones has opened lower, as per the forecasts. It sits 27.48 points lower at 10,516.65 on Wall Street.

In London, the FTSE 100 is labouring. The index is 5.16 points odwn on the day at 5560.37.

13.15:

At halftime the FTSE 100 is struggling to keep above the water line, slipping 10.29 points over the session to 5555.21.

Performance among the banks has been mixed. Royal Bank of Scotland and HSBC posted further gains, up 0.6p to 50.2p and 0.7p to 78.3p respectively, but Barclays dropped a penny to 322.7p and Lloyds slipped 0.3p to 77.3p.

Retailers were also lower amid further signs of cost pressures after inflation remained stubbornly high at 3.1% in August and Debenhams added to recent warnings over higher input costs.

Next, which is due to publish half-year figures on Wednesday, fell 34p to 2049p, Argos owner Home Retail Group dropped 2.4p to 213.3p and Primark firm Associated British Foods dipped 12p to 1060p.

Despite the cost uncertainty, department store chain Debenhams found the FTSE 250 Index risers board after forecasting a 20% rise in full-year profits to about £150m.

12.00:

Shares in New York are expected to open down. Broker BGC forecasts the Dow Jones Industrial Average to fall 16 points to 10,456.

11.50: It's a quiet day in corporate news. One of the few names reporting today is Debenhams.

The department store group is pencilling in full-year profits to August of about £150m, up around 20%.

That helped push Debs shares today, and the price has risen 1.4p, or 2.15%, to 66.4p in the session.

In the bluechips, the FTSE 100 is niow 3.15 points better off at 5568.68.

11.10: The lacklustre performance of London shares may be repeated on Wall Street later today.

Spreadbetters have the Dow Jones Industrial Average opening down 16 points at 10456.

The Footsie continues to struggle this morning, down 8.71 points at 5556.82.

In the currency markets, the pound was at $1.5429 dollars this morning compared to $1.5452 at the previous close. Against the euro, the pound was down, at €1.1970 compared to €1.1996 at the previous close.

10.20: Shares fell back today, taking stock after hitting a four-month high yesterday and with limp inflation and lower house prices weighing on confidence.

The FTSE 100 could not hang on to early gains and by mid-morning was 4.61 points lower at 5560.92.

Sentiment was held back by mixed UK economic data. Inflation remained unchanged, despite some predictions of a fall, as food and air fares became more expensive in August.

House prices fell for the second consecutive month, according to the Royal Institute of Chartered Surveyors.

The banks started well, adding to gains yesterday on the soft approach taken to implementing new funding rules. Royal Bank of Scotland and Lloyds Banking Group posted further gains, up 0.6p to 50.2p and 0.7p to 78.3p respectively.

Silver miner Fresnillo led the resources sector with an improvement of 23p to 1183p.

There was also a gain of 2% for Cable & Wireless Worldwide after the telecoms firm signed a contract worth £82m with the Foreign and Commonwealth Office.

On the fallers board, TUI Travel dropped more than 2% after Bank of America Merrill Lynch downgraded the tour operator to neutral from buy. Shares responded with a fall of 5.8p to 220.1p.

In a quiet session for corporate news, department store chain Debenhams leapt up the FTSE 250 Index risers board after forecasting a 20% rise in full-year profits to about £150m.

It also reported a recovery in like-for-like sales during the last 10 weeks of the year, albeit against weaker comparatives. The news encouraged investors as shares lifted 1.9p to 66.9p.