FTSE close: Tesco up; Mining shares surge

By Ed Monk for Thisismoney.co.uk
Updated:

 

17.00 (close)

People walk past London's Stock Exchange

Taking stock: Shares should rise this morning.

The London market headed for highs not seen since mid-November today after a strong morning session was bolstered by President Barack Obama's plans to extend tax breaks in the US.

Supermarkets were in sharp focus on the FTSE 100 Index earlier in the day as Tesco reported robust third quarter sales and vague Qatari bid talk returned to boost Sainsbury's shares.

The Footsie closed 38 points ahead at 5808.5 after the strong start was consolidated by President Obama's decision to keep tax cuts introduced during the last presidency in place for another two years.

The pound edged higher against a softer euro at 1.18 as investors focused on eurozone debt problems. Sterling was up against the dollar at 1.58.

Tesco was also one of the leading risers, up 2% or 10p to 430p, after its third quarter figures came in marginally above market expectations.

It said like-for-like sales were up 1.5% in the three months to November 27.

This was better than the 1.2% increase during the first half despite easing food price inflation.

The retail giant admitted the recent snow disruption had since impacted sales, but said lost ground would likely be recovered as consumers stock up over the next few weeks.

Rival Sainsbury's was nearly 5% higher, up 16.1p to 373.6p, as traders once more speculated over the possibility of takeover interest from the Qataris.

Elsewhere, higher metal prices were helping the market as mining shares surged.

BP lifted 1% or 5p to 457p, while among miners Antofagasta was 71p higher at 1528p.

Wolseley's trading update was also well received, with shares up 3% or 50p to 1880p after it said first quarter trading had been better than it expected thanks to a strong performance in the US.

The Plumb Center parent reported first quarter like-for-like sales up 4%.

Fellow FTSE 100 stock Standard Life joined it in making gains after the insurer announced a £42m deal to buy financial services technology provider Focus Solutions Group.

The takeover is expected to make it easier for the group's intermediaries to sell to clients and helped boost shares by 1.7p to 205.9p.

In the FTSE 250, a profits upgrade from Bellway sent housebuilding stocks racing higher.

Bellway added 54.5p to 612.5p - a gain of 10% - as it said interim profits would be up 20% as buyer interest has returned since the government spending review.

Rival Persimmon rose 32.6p to 415.3p, Charles Church owner Barratt Developments followed with a 4.9p rise to 83.7p and Taylor Wimpey was 1.7p higher at 28.9p.

The biggest Footsie risers were African Barrick up 34.5p at 600p, Resolution ahead 11.4p at 226.4p, Antofagasta up 71p at 1528p and Sainsbury's ahead 15.3p at 372.8p.

The biggest Footsie fallers were ICAP down 9p at 519p, Aggreko off 25p at 1538p, International Power down 6.3p at 413.6p and Serco off 6.5p at 565p.

15.50: The FTSE 100 is holding onto gains, up 49.21 points at 5,819.49, as Ireland gears up for a knife-edge vote on a tough austerity budget.

Finance minister Brian Lenihan is on his feet in the Dail at the moment, and his latest cuts package is expected to pass after a close vote. The budget is a condition of Ireland's bailout and its passage should help soothe fears about the eurozone debt crisis.

14.50:

The Dow Jones is well into positive territory shortly after the open, up 76.70 points at 11,438.89, after politicians in the US struck a deal to extend George Bush's tax cuts. There are also hopes that Ireland will pass a tough budget and calm nerves about eurozone debt.

We have an update on Wolseley, which is up 64p at 1,894p after reporting improved profits and strong sales in North America.

The Footsie is 68.29 points higher at 5,838.57.

13.15:

Higher metal and oil prices have given the Footsie a boost today - up 75.98 points to 5846.26.

Oil surged to $90.38 a barrel, having risen past £90 for the first time in two years last week.

BP lifted 2% or 8.5p to 458.5p, while among miners Antofagasta was 62p higher at 1519p.

Elsewhere, Standard climbed the risers board after the insurer announced a £42m deal to buy financial services technology provider Focus Solutions Group.

The takeover is expected to make it easier for the group's intermediaries to sell to clients and helped boost shares by 5.1p to 209.3p.

Bank shares pulled back from early session losses as wider sentiment turned, despite concerns over Europe's debt crisis continuing to dog the sector, which is seen as being exposed to many of the troubled countries.

Barclays rose 2.9p to 265.9p and Royal Bank of Scotland lifted 0.8p to 41.9p.

10.50:

Shares in builder Bellway have surged 44p to 602p after it said buyer confidence had returned to the housing market and it expected a 20% hike in half-year profits.

Struggling care home group Southern Cross fell 0.25p to 16.75p as it slumped further into the red. It faces tough negotiations over fees with cash-strapped councils.

The Footsie has made further gains and is trading 62.85 points higher at 5,833.13.

9.30:

We have more on Tesco's sales update and its welcome verdict that the UK is seeing a steady consumer recovery. The retailer's shares are up 7.45p at 427.45p.

The Footsie is 38.50 points higher at 5,808.78.

09.25:

The FTSE 100 moved higher today with Tesco making ground on solid sales numbers, but with banks under pressure as doubts grow over the effectiveness of the eurozone bailout.

The Footsie was 11.7 points higher in early trading, with the majority of stocks in positive territory.

Supermarket Tesco edged higher on the London market today as third quarter sales figures were well received.

The retail giant admitted the recent snow disruption had since impacted sales, but said lost ground would likely be recovered as consumers stock back up over the next few weeks.

The group's shares rose 2%. Tesco said like-for-like sales were up 1.5% in the three months to November 27, up on the 1.2% increase during the first half despite easing food price inflation, which helped shares rise 6.6p to 426.6p.

Bank shares remained under pressure as concerns over Europe's debt crisis continued to dog the sector, which is seen as being exposed to many of the troubled countries.

Barclays fell 4.1p to 258.9p, Royal Bank of Scotland lost 0.3p to 40.8p and HSBC shed 2.8p to 663.9p.

In currency, the pound at 9am was $1.5762 compared to 1.5675 dollars at the previous close.

Against the euro, the pound was €1.1820 pounds compared to €1.1817 at the previous close.

Eyes will be on the most indebted euro nations for signs of stress. Moves in the yields on Government bonds from these countries are indicating less confidence from the markets.

Spain, Ireland and Belgium have all seen the value of their debt slide in the past 24 hours. Portugal Greece and Italy have been flat.

Back in equities, Plumb Center parent Wolseley was on the rise, up 20p to 1850p, after it said its first quarter trading performance was slightly ahead of expectations, with like-for-like sales up 4%.

Elsewhere, housebuilder Bellway rose 15.5p to 573.5p as it said this year's interim profits would be up 20% as buyer interest has returned since the government spending review.

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