FTSE close: Next spurs retailers, miners fall

By Ed Monk for Thisismoney.co.uk
Updated: 12:27 EDT, 4 May 2011

17.20 (close)

The London market dived by nearly 100 points today as better than expected results from retailer Next failed to offset further falls for miners.

Mining stocks suffered after commodity prices continued to slide from recent highs, amid speculation that China is set for another interest rate hike.

The FTSE 100 index closed down 98.8 points at 5984.1, as the latest Markit/CIPS construction survey, which showed the sector's growth slowed in April, and disappointing house price data from Nationwide also weighed on sentiment.

But despite recent economic data making it less likely that the Bank of England's Monetary Policy will raise interest rates from their record low of 0.5% tomorrow, the pound still gained ground against the dollar and the euro at 1.65 and 1.11 respectively.

Retailers provided one of the few bright spots of the session after Next said it expected profits to be £15m higher than previous guidance.

The chain, which jumped 4% or 97p to 2319p, said the warm weather and recent spate of bank holidays had prompted shoppers to bring forward purchases.

Shares in Marks & Spencer benefited with a rise of 14.5p to 398.9p, while B&Q owner Kingfisher added 5.5p to 276p. Morrisons, which is due to issue a trading update on Thursday, rose 2.4p to 300.3p on hopes it has weathered the storm in the supermarket sector.

The blue-chip fallers board was dominated by commodity stocks, after precious metals slumped in price, led by silver which has recorded a 15% drop since the end of last week.

The biggest faller was Antofagasta, after the Chilean mining firm also went ex-dividend, meaning shareholders are no longer entitled to the latest payout. Shares were 9% lower - off 120p at 1212p - while Fresnillo dipped 83p to 1515p and Rio Tinto eased 140.5p to 4152p.

Legal & General was also hit after first quarter sales growth of 12% to £433m came in slightly below the market's consensus forecast.

Chief executive Tim Breedon said he was "very confident" about the company's prospects but shares still lost recent gains to stand 4.4p lower at 119.4p.

Business software firm Sage was down 0.3p to 286.4p, after bottom-line pre-tax profits rose 5% to £167.2m on the back of a cost-cutting drive and improved sales.

Outside the top flight, outdoor goods retailer Blacks Leisure jumped 12% despite admitting that recent sales had been disappointing.

Shares were 1.6p higher at 15.5p after the embattled retailer reported it had reduced losses, appointed a new chief executive and gained new banking facilities.

The top Footsie risers were Next up 97p at 2319p, Marks & Spencer ahead 14.5p at 398.9p, Kingfisher up 5.5p at 276p, and BT Group ahead 2.4p at 196.7p.

The top Footsie fallers were Antofagasta down 120p at 1212p, Arm Holdings down 44p at 558p, Fresnillo down 83p at 1515p, and Weir Group off 74p at 1860p.

15.15: The Dow Jones is down 73.7 points at 12,733.8 shortly after the opening bell.

US investors are mulling over the latest jobs data as well as acquisition activity in the technology and consumer goods sectors.

We have an update on Legal & General, which has failed to impress the City despite a 12% rise in first quarter sales and a confident statement regarding its future prospects.

Its shares are 3.6p lower at 120.2p.

The FTSE 100 has shed 67.9 points to trade at 6,015.

14.00:

US stock futures are weaker after a rise in jobs added by companies in April turned out to be lower than predicted - 179,000 instead of 200,000.

Media giant Time Warner beat first quarter profit expectations while cable company Comcast managed to meet forecasts. Kellogg Co will report results later.

Back in London, the FTSE 100 is down 57.7 points at 6,025.2.

Giles Watts, head of equities at spreadbetter City Index, commented that traders were taking profits off the table ahead of the Bank of England's decision on interest rates tomorrow and key US jobless data on Friday.

Meanwhile, we have more on the better-than-expected sales bulletin from fashion chain Next.

It got a boost from the spell of hot weather over Easter and customers splurging on new clothes for Royal Wedding celebrations.

'We believe these factors have encouraged consumers to bring forward summer purchases and we do not expect the current levels of growth to continue into the second quarter,' it said

Brent Crude is trading at just under £122 dollars a barrel. Gold was fixed this morning at $1,536 an ounce compared with $1,540.25 at the previous close.

13.10:

At lunchtime the Footsie is labouring, 60.49 points lower at 6022.39.

And investors are also braced for more weakness on Wall Street later in the session as disappointing manufacturing figures from China fuelled nerves over future demand levels in the resources sector.

The blue-chip fallers board is dominated by commodity stocks, led by Antofagasta after the Chilean mining firm also went ex-dividend, meaning shareholders are no longer entitled to the latest payout. Shares are nearly 9% lower - off 115p at 1217p - while Fresnillo has dipped 67.5p to 1530.5p and Rio Tinto eased 99.75p to 4193.5p.

Legal & General was also hit after first quarter sales growth of 12% to £433m came in slightly below the market's consensus forecast.

Chief executive Tim Breedon said he was 'very confident' about the company's prospects but shares still lost recent gains to stand 3.85p lower at 119.95p.

11.50:

A brief recovery this morning proved short-lived and the Footsie is now 52.72 points lower at 6030.13.

Sentiment has not been helped by been some lacklustre economic figures released today.

Nationwide figures showed the average cost of a UK home at £165,609 in April, down 0.2% on the month before.

The dip ends a run of price rises in February and March. Here's the full story.

Meanwhile, the stagnation in the property market was underlined by lending figures from the Bank of England which showed a 60% fall in mortgage lending in March.

10.25:

The FTSE 100 has struggled to make progress today despite strong results at retailer Next, with miners once again proving a millstone.

A profits surprise from Next failed to prevent shares falling back today amid further signs of pressure on silver and gold prices.

The latest slump for mining stocks ensured the FTSE 100 Index retreated almost fifty points in early trading before recovering to sit 12.64 points lower at 6070.24.

This despite strong gains at retailers after Next said it expected profits to be £15m higher than previous guidance.

The retailer, which jumped 4% or 83.5p to 2315p, said the warm weather and recent spate of bank holidays had prompted shoppers to bring forward purchases.

Shares in Marks & Spencer benefited with a rise of 9.3p to 393.75p, while B&Q owner Kingfisher added 6.25p to 276.75p and Tesco lifted 3.6p to 409.6p.

The fallers board was topped by Chilean mining firm Antofagasta, down 76.5p to 1259.5p, while Fresnillo lost 41.5p to 1556.5p and Rio Tinto dropped 83.5p to 4209p. Silver has shed 15% of its value since the end of last week, while gold has also fallen back amid signs the precious metals boom may be over.

Outside the top flight, Blacks Leisure shares rose 4%, up 0.6p to 14.5p, after the embattled retailer reported reduced losses, the appointment of a new chief executive and the award of new banking facilities.

The mega-flotation of commodities trading giant Glencore came a step closer after the company valued itself at around £36.5bn. The planned listing will propel Glencore straight into the FTSE 100.

The company also confirmed 31% of the shares offer will go to a select group of cornerstone investors - understood to include Arab emirate Abu Dhabi - while the move is also expected to create nearly 500 paper multi-millionaires, including chief executive and largest shareholder Ivan Glasenberg.

Glencore confirmed the price range for the initial public offering (IPO) will be between 480p and 580p per share.