FTSE close: Miners suffer, Thorntons down

By Ed Monk for Thisismoney.co.uk
Updated: 12:20 EDT, 3 May 2011

17.15 (close)

The FTSE 100 Index edged higher today despite weakened mining stocks and speculation that the death of Osama bin Laden could trigger revenge terrorist attacks.

The blue chip index closed up 13 points at 6082.9 in its first day of trading after a four-day break as investors fretted about the country's economic recovery and how it will be affected by continuing high inflation.

World markets were boosted yesterday after bin Laden's death was confirmed by US president Barack Obama, triggering gains in Asia, Europe and the US, before the risk of repercussions dampened the rally.

But recent moves by India and Russia to raise interest rates in the face of spiralling prices have raised further questions about the strength of the global recovery.

And with commodity prices starting the week on the back foot, copper miner Antofagasta sank to near the bottom of the blue chip index, dropping 35p to 1332p, while fellow copper giant Kazakhmys slipped 47p at 1332p.

Downbeat surveys on the retail and manufacturing sectors also weakened sentiment.

The latest retail sales survey from the CBI suggested a pick up in trade in April but worryingly for the economy, companies feel the growth may be short-lived.

Retail shares fell as a result, with Marks & Spencer down 3.6p at 384.4p, and B&Q parent Kingfisher off 4p at 270.5p.

Elsewhere, the Markit/CIPS Purchasing Managers' Index for manufacturing fell to 54.6 in April from a downwardly revised 56.7 in March, signalling further weaknesses in the economy and another drop in consumer spending.

The disappointing figures hit the pound, which fell against most major currencies. This left sterling at 1.65 against the greenback and 1.11 against the single currency.

Man Group led the risers' board, up 8.3p at 258p, after the investment manager successfully launched a new fund in Japan, which has raised 1.5 billion US dollars (£901m).

An otherwise quiet start to the week shifted the focus on to chocolate retailer Thorntons, which slumped nearly 13% or 10.3p to 70p after warning on profits.

The company said the hot weather put customers off buying chocolate and this meant same-store sales plunged 23% over the crucial Easter week. It now expects pre-tax profits to be between £3m and £4.5m for the year to June 25, compared with £6.1m the previous year.

Shares in car dealership Lookers were unmoved after veteran investor Jack Petchey confirmed his interest in a takeover bid for the Manchester-based business.

Mr Petchey's investment vehicle said Lookers had failed to provide it with information needed to make an offer, which left shares flat at 65.8p.

The top Footsie risers were Man Group up 8.3p at 258p, Reckitt Benckiser ahead 95p at 3419p, Tui Travel up 6.5p at 245.7p, and AstraZeneca ahead 72p at 3062p.

The top Footsie fallers were Smiths Group down 76p at 1256p, Randgold Resources off 244p at 4976p, Kazakhmys down 47p at 1332p, and Arm Holdings off 18.5p at 602p.

15.20: Over on Wall Street the Dow Jones has opened higher and is currently 22.18 points better off at 12,829.54.

Back in blighty, the FTSE 100 is 8.8 points higher at 6078.71.

14.20:

We've got more detail on those disappointing manufacturing figures.

Manufacturing grew at its slowest rate for seven months, a worrying sign for the sector which has proved much needed support for the economic recovery. Here's more.

Meanwhile, the FTSE 100 has clawed back losses to sit just 2.57 points lower at 6067.33.

13.00:

The Footsie is now underwater with sentiment hurt by pessimistic reports on the economy.

Early gains for the FTSE 100 have been wiped out and the index is currently 14.4 points lower at 6055.49.

Downbeat surveys on the retail and manufacturing sectors weakened shares. The latest retail sales survey from the CBI suggested a pick up in trade in April but worryingly for the economy, companies feel the growth may be short-lived.

Retail shares fell as a result, with Marks & Spencer leading the sector's declines, down 8p at 380p, and Next and B&Q parent Kingfisher off 45p at 2192p and 5.7p at 268.8p respectively.

Elsewhere, the Markit/CIPS Purchasing Managers' Index fell to 54.6 in April from a downwardly revised 56.7 in March, signalling further weaknesses in the economy and another drop in consumer spending.

The disappointing figures hit the pound, which fell against most major currencies.

Man Group led the risers' board, up 8.7p at 258.4p, after the investment manager successfully launched a new fund in Japan, which has raised £901m.

We've got more details on the potential bid for car dealership Lookers.

11.05:

We have more on the profits warning from Thorntons, which has blamed unseasonally hot weather over Easter for a 23% plunge in sales that week.

The disappointing Easter follows a difficult Christmas for Thorntons due to the severe winter weather.

Shares in the chocolatier are down 11% or 8.75p at 71.5p.

The FTSE 100 is up 7.1 points at 6,077.

10.10:

Sentiment has been knocked by manufacturing data that has come in below forecast.

The latest Markit/CIPS manufacturing PMI headline index fell to 54.6 in April, its lowest since September, from a downwardly revised 56.7 in the previous month and well below the 56.9 consensus forecast in a Reuters poll.

It means activity in the sector, which has provided support to the UK economic recovery, grew more weakly than expected in April, at its slowest pace in 7 months. There was also a sharp slowdown in new orders.

Here's Vicky Redwood at Capital Economics: 'On the face of it the figures look pretty disappointing. The manufacturing recovery is coming off the boil a bit and that was the one part of the economy that was growing. At the margin this gives another reason for the MPC to hold fire on interest rates.'

Shares dipped a fraction on the news and the FTSE 100 is now 14.76 points higher at 6084.66.

09.25:

The FTSE 100 has struggled to make gains today as miners suffered while Thorntons slumped and Lookers leapt on bid talks.

London shares struggled to make headway today after most Asian markets reversed gains seen following news of the death of Osama bin Laden.

A stronger dollar made crude oil and other commodities more expensive and meant mining stocks dominated the fallers board in London.

In its first session since the extended holiday weekend, the FTSE 100 Index stood 7.1 points higher at 6077, with Randgold Resources among the heaviest fallers after a drop of 175p to 5045p.

A quiet start to the week shifted the focus on to chocolate retailer Thorntons, which slumped 9% or 7.4p to 72.9p after warning on profits.

The company said the hot weather put customers off buying chocolate and this meant same-store sales plunged 23% over the crucial Easter week. It now expects pre-tax profits to be between £3 million and £4.5 million for the year to June 25, compared with £6.1 million the previous year.

Shares in car dealership Lookers were 3% higher after veteran investor Jack Petchey confirmed his interest in a takeover bid for the Manchester-based business.

While Mr Petchey's investment vehicle said Lookers had failed to provide it with information needed to make an offer, shares still rose 1.9p to 67.6p.