FTSE Close: Vodafone, M&S down; Experian up

By THIS IS MONEY
Updated: 12:41 EDT, 17 November 2010

17.10 (close)

The FTSE 100 Index spent much of today's session in negative territory before closing 10.7 points higher at 5692.6.

Fears over a bail out for Ireland also continued to weigh on sentiment on Wall Street, with the Dow Jones Industrial Average struggling to move from its opening mark after suffering its biggest loss since the middle of August the previous session.

A subdued US inflation report and another weak reading on America's housing market did little to draw investor attention away from Europe's sovereign debt crisis, with UK Chancellor George Osborne saying Britain stood ready to offer support to Ireland if needed.

The threat of higher interest rates in China added to market jitters, which yesterday sent the Footsie tumbling by almost 2.5%.

But it was a marginally better session for the pound, which edged higher against the dollar after recent losses - ahead at just over $1.59.

Sterling was helped by an unexpected fall in UK jobless benefits and further signs in minutes of the last rates meeting that the Bank of England is in no rush to pump more money into the economy.

Mining stocks remained under pressure due to the China rate hike fears, with African Barrick Gold surrendering earlier gains to stand 11.5p lower at 539.5p.

One of the biggest falls came from mobile phone giant Vodafone, which dropped 3.5p to 167p after its shares went ex-dividend, excluding new investors from the latest dividend payment.

Retailers were also under pressure for the same reason after Marks & Spencer dropped 11.8p to 384.2p and Sainsbury's fell 6p to 367.7p.

A profits guidance upgrade from British Gas parent Centrica failed to help the stock, as shares slipped 1.2p to 332.2p despite news that operating profits for 2010 were likely to be slightly ahead of the £2.2bn expected.

Credit checking group Experian was enjoying better fortunes, with shares up 6% or 44.5p to 748p after posting better-than-expected first-half results in the wake of a strong performance in Latin America.

In the FTSE 250, Premier Foods jumped 0.7p to 18.1p after consolidation elsewhere in the food manufacturing sector boosted sentiment.

The deal-making involved Fox's biscuits and Goodfella's pizza firm Northern Foods, which jumped more than 24% or 11.25p to 56.5p, after announcing plans to merge with Irish-based supermarket sandwich supplier Greencore.

The tie-up is expected to generate cost savings of around £40m a year.

Babycare retailer Mothercare edged up 3.5p to 520p after reporting a 22% jump in half-year profits to £12.2m and total sales up 7.5% as chief executive Ben Gordon said the international business moved from strength to strength.

The biggest Footsie risers were Experian up 44.5p to 748p, GlaxoSmithKline ahead 29.5p to 1243p, Arm Holdings up 8.3p to 360.6p and GKN up 4.2p to 185.5p.

The biggest Footsie fallers were Marks & Spencer down 11.8p to 384.2p, African Barrick Gold down 11.5p to 539.5p, Vodafone off 3.5p to 167p and 3i Group down 5.9p to 309p.

12.45: London's blue-chip share index remains on the back foot, down 11.3 points at 5,670.6.

Futures trading suggested there would also be more falls on Wall Street after the Dow Jones tumbled more than 1.5% overnight.

Trading conditions were also subdued across European markets, with only tentative gains seen across the Cac 40 in France and Dax in Germany.

In London, some miners fought back from heavy falls in recent days on the China rate hike fears, although it was a mixed session again for the sector. Antofagasta lifted 18p to 1,377p, but African Barrick Gold was 13p down at 538p and silver miner Fresnillo dropped 17p to 1,344p.

One of the biggest falls came from mobile phone giant Vodafone, which dropped 3.9p to 166.6p after its shares went ex-dividend, excluding new investors from the latest dividend payment.

A profits guidance upgrade from British Gas parent Centrica failed to help the stock, as shares slipped 3.6p to 329.8p despite news that operating profits for 2010 were likely to be slightly ahead of the £2.2bn expected.

Pubs group Enterprise Inns was top of the second tier risers thanks to a broker upgrade in the wake of yesterday's encouraging results. The firm's shares added 4.7p to 104p.

Babycare retailer Mothercare edged up 2.5p to 519p after reporting a 22% jump in half-year profits to £12.2m and total sales up 7.5% as chief executive Ben Gordon said the international business moved from strength to strength.

10.00

The Footsie is moving in lacklustre fashion today as worries about Ireland's escalating debt crisis and speculation China may hike interest rates hang over the markets.

After dropping almost 2.5% yesterday, the FTSE 100 was hovering around 11 points down at 5,670.82 in morning trading.

Bank shares were hit as eurozone ministers dispatched experts to Dublin for talks with the Irish government. HSBC was down 2.1p at 662.90p while Standard Chartered fell 2p to 1,816p.

Richard Hunter, head of equities at Hargreaves Lansdown, said: 'There are concerns around Ireland and possible contagion into other eurozone countries like Portugal and, a worse-case scenario, Spain, and whilst the talks are ongoing... there remains negative sentiment hanging over the market.'

Meanwhile, miners were down on fears about China's growth prospects. African Barrick Gold shed 8.5p to 542.2p and Vedanta Resources dropped 21p to 2173p.

A big FTSE 100 faller was mobile phone firm Vodafone, off 3.85p at 166.6p after its shares went ex-dividend, which bars new investors from getting its latest dividend payout.

The retail sector was hit for the same reason as Marks & Spencer dropped 9p to 387p and Sainsbury's fell 5.3p to 368.4p.

Upbeat first-half results boosted British broker ICAP, up 0.5p at 465.40p, and credit information group Experian, up 32p at 735.50p.

Food manufacturer Northern Foods jumped 10.25p to 55.5p after announcing a merger with Irish-based supermarket sandwich supplier Greencore that is expected to cut costs by around £40m a year. Premier Foods also rose 0.7p to 18.2p on the news.

'There remain bright spots on the horizon. We are still over 70% in terms of US and UK companies which have outperformed analyst expectations in the third-quarter,' commented Mr Hunter.