FTSE close: Next, Reckitt up; banks fall

By Reuters
Updated: 12:26 EDT, 15 April 2011

17.25 (close)

Friday feeling: Commodity-linked stocks likely to rise

The FTSE 100 made gains today despite fears over China's sky-high inflation and more sovereign debt woes across Europe.

A positive start to trading on Wall Street thanks to lower-than-expected US inflation figures helped the Footsie make progress, closing up 32.2 points to 5996.

Retailers and the property sector also helped by offsetting declines in the mining and banking sectors.

Banks were under pressure as Europe's sovereign debt crisis took another twist with a severe ratings downgrade for Ireland and further measures by Greece to bring its battered finances back under control.

The decision by Moody's to cut Ireland's credit rating two notches to leave its debt on the brink of junk status had a bearing on banking stocks, particularly as Greece was also presenting a mid-term package of austerity measures in the hope of bringing its finances under control.

Royal Bank of Scotland dropped 0.9p to 42.7p and Barclays fell 0.2p to 301.7p.

The European troubles also took their toll on the euro, with sterling rising against the single currency, edging up to 1.13 euros.

Shares in high street firms offered support to the Footsie as department store chain John Lewis revealed sales jumped 7.3% last week, albeit boosted by an extra day of trading due to comparisons with Easter Sunday last year.

Fashion chain H&M also met forecasts with a 5% drop in like-for-like sales for March, helping shares in FTSE 100 retailer Next rise 44p to 2205p, Marks & Spencer by 3.7p to 374.5p and Primark-owner Associated British Foods by 16p at 1047p.

Heavyweight stocks such as drugs giant GlaxoSmithKline and mobile phone firm Vodafone played their part in propping up the FTSE 100 - up 17.5p to 1258.5p and 2.8p to 178.25p respectively - while property firms benefited from an upbeat note on the sector by JPMorgan.

As a result, British Land saw its shares improve 17p to 569p and Land Securities added 15p to 753.5p.

China's latest strong inflation figures ensured miners remained under pressure amid fears of more measures to cool the country's blistering economic growth.

Fallers included Vedanta Resources down 24p to 2308p.

But Reckitt Benckiser was 85p higher at 3200p as it pulled out of the nosedive that wiped £2bn from its value following news of chief executive Bart Becht's decision to leave the household goods firm in September.

Ladbrokes was one of the top risers in the FTSE 250 Index, up 9.4p to 144.3p, after it said it was no longer in talks over a possible takeover of 888 Holdings. 888 shares were off 6.75p at 34.75p.

The biggest Footsie risers were Man Group up 10.2p to 250.6p, British Land ahead 17p to 569p, Reckitt Benckiser up 85p to 3200p and Autonomy Corporation up 32p to 1577p.

The biggest Footsie fallers were Essar Energy down 9.3p to 448.5p, Royal Bank of Scotland off 0.9p to 42.7p, Smiths Group down 21p to 1300p and Wolseley down 23p to 2097p.

16.10: The Dow Jones is holding on to gains, up 32.9 points at 12,318.

A key US consumer sentiment survey was ahead of forecasts while official government figures showed industrial production was up 0.8% in March.

The FTSE 100 is 21.4 points higher at 5,985.24 shortly before the closing bell.

14.35:

The Dow Jones has opened 19.2 points higher at 12,304.37.

US investors took heart from a 0.5% rise in consumer prices in March, which they took to indicate that inflationary pressures remain in check.

Bank of America missed profit expectations but its revenue figure beat hopes.

The FTSE 100 is up 22.9 points at 5,986.7.

11.45:

We have more on Ladbrokes, which has called off its pursuit of 888 Holdings following months of talks, claiming a deal was not in the best interests of its shareholders.

The bookmaker admitted discussions were taking place in December amid speculation it could stump up a £240m offer - but it is believed negotiations foundered over the price.

Shares in 888 tumbled 12% or 5p to 36.5p following the news, but Ladbrokes' stock bounced 8.2p to 143.1p.

The FTSE 100 is up 11.7 points at 5,975.5.

'The FTSE is up as China's growth remains strong, although gains were kept in check by a credit rating downgrade in Ireland,' commented Ben Critchley, sales trader at spreadbetter IG Index.

'Looking ahead to the US, investors will have slept on Google's announcement that included a vast 54% spending increase in the first quarter. Tech stocks could well feel some pressure as a result, and there is the potential for a bumpy start to the Wall Street session.'

Futures trading points to a lower opening on the Dow Jones. US investors are awaiting a cluster of economic updates including inflation figures, manufacturing data and a consumer sentiment survey.

Brent Crude is just under $121 a barrel today and gold was fixed this morning at $1472.50 an ounce compared with $1465.75 at the previous close.

10.20:

Strong retailers and property stocks helped Britain's top share index end a tough week on the front foot today as investors shrugged off ongoing nerves over inflation and Europe's debt crisis.

The FTSE 100 has edged 10 points up at 5,974.

Traders said that while the US earnings season has not got off to a very strong start, with revenue growth on the whole disappointing, rising profits have been welcomed by the market.

'I think people are positive that companies are making money, because they've got rid of all the excess fat, and it makes them more profitable longer term,' Joe Rundle, head of trading at ETX Capital, said.

'I think people are optimistic, and I think the analysts got ahead of themselves (with their forecasts),' he said.

Real estate investment trusts were lifted by a broadly positive note on the sector from JPMorgan, which kept its 'overweight' stance on Land Securities - up 8.3p (1.1%) to 747p - and British Land, up 10.5p (1.9%) to 562p.

In the second tier, office landlord Derwent London gained 55p (3.2%) to 1,725p as the same broker raised its rating on the stock to 'overweight' from 'neutral'. Elsewhere among the gainers, retailers found favour after John Lewis's Waitrose reported soaring weekly sales, while sales at John Lewis's department stores increased 7.3% to £52.3m.

After fashion chain H&M met forecasts with a 5% drop in like-for-like sales for March, Next climbed 31p to 2,192p, while Marks & Spencer added 3.05p to 373.8p.

Reckitt Benckiser was also higher, up 34.5p to 3,149.5p as it pulled out of the nosedive that wiped £2bn from its market value following the announcement that chief executive Bart Becht is to leave the household goods firm.

Ladbrokes was the top riser in the FTSE 250, up 5.7p to 140.6p, after it said it was no longer in talks over a possible takeover of 888 Holdings.

Sterling edged higher against the euro as the single currency was hit by a Moody's downgrade of Ireland, which highlighted the risk of debt restructuring in some euro zone countries. The euro's falls were limited, however, and it stayed near this week's 5-1/2 month high of 89.24 pence as it continued to be supported by expectations the European Central Bank would keep raising interest rates while UK rates stay on hold.

Banks fell, with sentiment surrounding the sector soured as Moody's cut Ireland's sovereign rating by two notches to the verge of junk status and kept its outlook on negative.

'We're seeing continual pressure on banking stocks and it's dfficult for the market really to make any gains when the headlines are full of rising bond yields, downgrades to sovereign debt ratings, and the increasing likelihood of a default,' Angus Campbell, head of sales at Capital Spreads, said.

Banks will remain under the spotlight on Friday, with Bank of America scheduled to report quarterly earnings.

Man Group rose 2.1%, bouncing back from the previous session's falls as Bank of America Merrill Lynch added the world's biggest listed hedge fund manager to its Europe One list.

Weakness was seen from the miners as turbo-charged first-quarter GDP growth and 32-month high inflation in China fuelled concern about further fiscal tightening from Beijing.