FTSE close: Centrica, miners up; retailers fall

By Reuters
Updated: 12:26 EDT, 30 March 2011

17.20 (close)

The London market was kept afloat by mining giants today after the owner of Currys and PC World issued a profits warning triggering declines among retailers.

FTSE 250 firm Dixons Retail saw shares plunge 18% as it revealed sales declines in the UK and Ireland worsened to 11% since Christmas and said it was considering pulling out of Spain.

The warning hit firms across the retail sector, although the FTSE 100 Index closed 16 points higher at 5948.3.

Dixons shone the spotlight on the troubled high street sector after its profit alert shocked the market, coming just two months after it last lowered expectations.

Its shares fell 3p to 13.7p, while rival and Comet parent Kesa Electricals dropped 7p to 124p.

Fellow FTSE 250 stock Home Retail Group, which owns Argos and Homebase, followed it with a 8.5p drop to 192.9p.

In the top tier, Marks & Spencer was the biggest faller with a 10.6p drop to 340.7p, while Next was not far behind as it dropped 54p to 2011p.

There was little cheer offered by the results of a survey from the CBI which revealed that high street trading grew in March compared with a year ago and at a faster rate than last month, with the group warning sales growth still remained subdued.

But the slight improvement boosted the pound, which was up against the US dollar at 1.60 and the euro at 1.13.

However, luxury group Burberry bucked the trend as it continued to benefit from a broker note citing it as a takeover target. Shares were ahead 23p at 1185p.

The heavily-weighted mining sector was up after Anglo-Australian Rio Tinto increased its stake in bid target Riversdale to 41%.

Rio Tinto, which is seeking to get enough shareholder support for its 3.9 billion US dollar (£2.4bn) bid for the Mozambique-focused steel-making coal miner, saw shares rise 44p to 4410p, while Vedanta Resources was ahead 76p at 2314p and BHP Billiton advanced 34.5p to 2449p.

British gas parent Centrica saw shares lift 8.1p to 330.7p after it signed a 3.3 million US dollar (£2m) contract with Aberdeen's Plexus Holding for the supply equipment needed for five exploration wells in the Norwegian north sea.

Elsewhere, Domino's Pizza was suffering after it revealed growth in same-store sales in the UK over the 13 weeks to March 27 were offset by deteriorating sales in Ireland.

The company said like-for-like sales in its 48 stores in the Irish Republic reduced by 10.5% in the 13 weeks to March 27, while its stores in the UK saw sales increase by 5.5%. Shares in the fast food delivery firm fell 4% or 18.8p to 427.2p.

The biggest Footsie risers were Vedanta Resources up 76p at 2314p, Centrica ahead 8.1p at 330.7p, British American Tobacco up 59p at 2521p and Petrofac ahead 30p at 1459p.

The biggest Footsie fallers were Marks & Spencer down 10.6p at 340.7p, Lloyds Banking Group off 1.7p at 58.6p, Next down 54p at 2011p and Invensys off 8.1p at 346.8p.

14.50: Over on Wall Street, the Dow Jones has risen today and is now 54.6 ppints higher at 12.333.62.

Back in London, the FTSE 100 is 25.5 points higher at 5957.69.

13.45:

The Footsie is still hovering 24.4 points up today at 5,956.6.

The latest figures out show Domino's Pizza has had a mixed bag, with big sales dips in Ireland dragging down decent like-for-like figures in the UK - which represents, afterall, 93% of its sales. Read more here.

12.25: Moss Bros has bucked the retail drag with a 3.4% rise (0.9p) to 27.8p as its turnaround plans seem to be - well, turning results round.

It narrowed a £4m loss to a £2.7m one in 2010 - for the full report, click here.

The Co-operative Group reported a whopping 48% rise in underlying profits which translates to good news for stock holders, with dividend payments to its 6.5m members up by 55% to £77.4m.

And devastating earthquakes in Chile and New Zealand, as well as floods in Australia, led to 'significant' claims in 2010 and sent profits plunging 43% at insurer Lloyd's of London - and that's without the impact of the Japanese tsunami. Click here for more.

Finally, BAA is weighing up a European Court plea after its arguments against the Competition Commission's decree to sell two of its airports - including Stansted - fell on deaf ears. Read more here.

11.25: Among the retailers, Dixons has issued its second profit alert this year as hard-pressed consumers cross electrical goods off their shopping lists.

The retailer, which also owns Currys and PC World, saw its shares tumble 18% or 2.97p to 13.78p after same store sales were down 11% in the 11 weeks to March 26 – a worsening of the 4% slide seen over Christmas. We've got more on that here.

The FTSE 100 is hanging on to early gains and is currently 22.85 points higher at 5955.02.

10.15:

London shares pushed back up towards the 6,000 mark this morning, helped by banks and miners, with investors happy at an improving outlook for company earnings.

The FTSE 100 index rose 23.8 points to 5,955.9.

Analysts Michael Hewson said that the March high of around 6,040 could be reached soon, as long as the index closes above its 55 day moving average at 5,945. It is up for six consecutive sessions, its longest winning streak since August, and is currently up 1.1% for the year.

'People are more nervous than they were because of the Middle East, oil prices and Japan but corporate momentum is sufficiently strong to sustain the economy, and there's a view that the issues are transitory,' John Haynes, head of research at Rensburg Sheppards said.

'Of course if Saudia Arabia goes pop, all bets are off, but for now people are taking the view that these things will pass and there's no need (for companies) to redraw plans.'

Miners and banks tend to perform well when appetite for risk increases, hence provided the bulk of the gains. Vedanta Resources added 86p (3.8%) to 2,324p, the top gainer, with traders citing a note from Morgan Stanley which said the India focused miner has a 64% upside.

Global miner Rio Tinto gained 89p (2%) to 4,455p, while Europe's largest bank HSBC put on 3.6p (0.5%).

Randgold Resources however bucked the trend, slipping 10p (0.2%) to 4,646p after Societe Generale started coverage of the precious metals miner with a 'sell' rating.

IMI rose 22p (2.2%), among the top performers, after RBC Capital Markets, in a broader upbeat note on UK industrials, selects the engineering firm as its 'top pick' in the sector.

However, reminding investors that companies exposed to the domestic economy face tough times ahead, retailers were down. M&S is the biggest faller with a 7.8p drop to 343.6p, while Next also felt the heat as it dropped 33.5p to 2031.5p.

The casualties continued in the second tier FTSE 250 - Currys and PC World parent Dixons Retail was one of the biggest after it warned over profits for the second time this year. Its shares plunge more than 12% as it revealed that sales declines in the UK and Ireland worsened to 11% since Christmas and said it was considering pulling out of Spain.

Dixons shone the spotlight on the troubled high street sector after its profit alert shocked the market, coming just two months after it last lowered expectations.

Its shares fell 2.1p to 14.7p, while fellow FTSE 250 stock and Argos parent Home Retail Group followed it with a 5.4p drop to 196p.

Domino's Pizza was suffering after it revealed strong same-store sales in the UK over the 13 weeks to March 30 were offset by deteriorating sales in Ireland. The fast food delivery firm saw shares slump 9% or 39.8p to 406.3p.