FTSE close: Land Secs up; Sainsbury's down

By Ed Monk for Thisismoney.co.uk
Updated: 12:23 EDT, 18 May 2011

17.10 (close)

London's blue chip sector broke its five day losing streak today as property firms surged ahead after Land Securities said the firm's markets were in 'recovery mode'.

Shares in the real estate investment trust jumped 6% and drove gains across the sector after it reported an 18% jump in its net asset value and chief executive Francis Salway reported hopeful signs for demand in London.

A rally for heavily weighted miners and energy companies also helped drive the FTSE 100 Index up 62.5 points to 5923.5.

The pound was down against the euro and the dollar after six of the nine-strong Monetary Policy Committee at the Bank of England voted to keep rates on hold at their record low of 0.5%.

Higher than expected unemployment figures also depressed sterling, which was at 1.62 against the greenback and 1.13 against the single currency.

A weaker US dollar helped volatile commodity prices rise, as Brent crude gained 1.7% to 112.5 US dollars and copper also rebounded.

Mining stocks in London were also lifted after Bank of America Merrill Lynch said a survey of fund managers for May showed investors growing more confident in Japan's ability to rebound from the earthquake and tsunami disasters.

Eurasian Natural Resources was among the biggest risers, up 75p to 1810p, after Citigroup upgraded it to "buy". Randgold Resources was also up 177p to 4797p as gold prices firmed and Kazakhmys was ahead 39p at 1256p.

But the main focus in the top flight was on the property sector after Land Securities was up 62.5p at 5923.5p, British Land was ahead 26.5p at 604.5p and Hammerson gained 15p to 479.2p.

The cheer failed to extend to catering company Compass, even though it announced a 12% rise in half-year operating profits and rewarded shareholders with a 30% dividend hike. The stock opened higher but later fell back to stand 4p lower at 575p.

There was also weakness in the retail sector, with Sainsbury's dropping 10.7p to 344p after its shares went ex-dividend, and with a drop of 13.9p to 209.1p for Argos owner Home Retail Group in the FTSE 250 Index.

Mothercare was one of the top risers in the second tier after the babycare products retailer outlined plans to close more than 100 high street shops over the next two years.

The chain expects the cost of the move to be limited by the fact that many of its store leases are due to expire within a year or two.

Investors welcomed the strategy as shares jumped 5% or 23.3p to 448.5p, despite Mothercare reporting a drop in full-year profits today.

The biggest Footsie risers were Land Securities, up 62.5p at 5923.5p, British Land ahead 26.5p at 604.5p, Autonomy up 75p at 1810p, and Eurasian Natural Resources ahead 34.5p at 841p.

The biggest Footsie fallers were Sainsbury's down 10.7p at 344p, Tui Travel off 4.5p at 239.3p, Admiral Group off 30p at 1707p, and 3i off 4.7p at 289.4p.

15.45: The Dow Jones is flat, up just 5.9 points at 12,485.4, as US investors absorb mixed earnings reports.

Computer giant Dell overshot earnings expectations, while retailer Target and farm machinery firm Deere also beat hopes.

But there was disappointment over quarterly profits from office products retailer Staples.

The FTSE 100 is up 59.2 points at 5,920.2.

Brent crude is trading at just under $111 a barrel.

14.35:

A final price for Glencore's mammoth float is due tomorrow. Ahead of that, David Buik of BGC Partners has suggested a consensus price after talking to fund managers and brokers.

'Suggested opening grey market price tomorrow is - 545-552p. It is thought that 105 million shares will be bought by tracker funds,' he commented.

French Connection has seen 'significant improvement' in sales since Easter in some good news for the retail sector

This strong growth over recent weeks helped the fashion chain offset difficult conditions at the start of the year, although like-for-like sales for its UK and Europe retail arm were still 1.8% lower between February 1 and May 14. The firm's shares are down 4.25p at 92.5p.

Cinema operator Cineworld has reported a 7.8% decline in box office revenues in the 19 weeks to May 12, while total revenues dropped 8.9%. The firm blamed a lean patch for 3D films. Its stock is 11p higher at 205p.

The FTSE 100 is up 44 points at 5,905.

The Dow Jones has opened down 9.1 points at 12,470.5.

13.05:

At lunchtime, the FTSE 100 is 42.74 points higher at 5903.74.

On Wall Street later, the Dow Jones is expected to open higher.

12.00:

We have more on the news from Land Securities, which has pushed property stocks to the top of the riser board today.

It posted an 18% rise in value per share and said it will continue speculatively developing offices to meet central London demand that it predicts will be stronger than expected.

Shares in Land Securities are up 48.5p at 796p, while British Land is 23.5p higher at 601.5p, and Hammerson is ahead 16.1p at 480.3p.

Compass has slid 5p to 574p despite generating a rise in half-year revenues and profits.

The company's catering operations in Japan have taken a hit from the earthquake and tsuanami, and it is contending with food inflation. Read more here.

The FTSE 100 is 41.21 point higher at 5,902.2.

10.20:

The FTSE is hovering - up 54 points to 5,195 - as unemployment figures showed the number of jobless fell by 36,000 to 2.46m over the three months to March.

This beat expectations and brings the unemployment rate down 0.1 points to 7.7% - we've got a full report here.

And minutes from the last Bank of England's MPC meeting on interest rates showed members voted 6-3 in favour of the 0.5% hold; that was the same split as the previous three months.

Bad news for the high street as Mothercare plans to sell 110 stores when their lease runs out. Its shares are up 14.8p (3.5%) to 440p so far this morning.

The retailer expects big savings from the restructuring - read more on the story here.

09.10: The FTSE 100 pushed higher today on gains at property firms after Land Securities reported recovering estate values, while commodity prices rallied.

The Footsie leapt on opening and by 9am was 53.95 points higher at 5914.95.

Economy data will be watched this morning with employment figures and Bank of England Monetary Po0licy Committee minutes due.

Shares in real estate investment trust Land Securities jumped 7% after it reported an 18% rise in its net asset value and chief executive Francis Salway said its markets were "in recovery mode" amid particularly hopeful signs in London.

Japan's Nikkei 225 index rose 1% following reports of a recovery in industrial production after the massive disruption caused by the country's earthquake and tsunami in March.

Stronger commodity prices helped mining stock progress, but the main focus was on the property sector after Land Securities added 53.75p to 801p, British Land cheered 32.75p to 610.75p and Hammerson gained 20.9p to 485.1p.

The cheer failed to extend to catering company Compass, even though it announced a 12% rise in half-year operating profits and rewarded shareholders with a 30% dividend hike. The stock opened higher but later fell back to stand 3.5p lower at 575.5p.

There was also weakness in the retail sector after falls of 13.05p to 341.7p for Sainsbury's and a drop of 10.10p to 212.9p for Argos owner Home Retail Group in the FTSE 250 Index.