LONDON (ShareCast) - - FTSE closes up 25 points
- Retail sales come in below expectations
- US home sales fall 5.1 per cent in January

techMARK 2,891.86 +0.55%
FTSE 100 6,838.06 +0.37%
FTSE 250 16,460.88 +0.56%

It was a strong finish for the FTSE today, despite retail sales showing a sharp drop for January.

The FTSE 100 closed up 25.07 points, or 0.37%, marking a gain of 174.44 points over the week.

Over in the States this afternoon data revealed that US existing home sales fell 5.1% in January, to 4.62m, a bigger drop than had been predicted by consensus forecasts, at 4.1% to 4.67m.

Barclays said it saw two main factors as contributing to the decline: "First, existing home sales are counted at the close of the sale, meaning they generally lag market conditions by up to 60-90 days [...] In addition, pending home sales fell sharply in December, declining 8.7% on the month, continuing a streak of seven straight monthly declines."

It also said that looking ahead it expects the negative effect of higher mortgage rates "to fade somewhat" given that rates have been "fairly stable since September".

Retail sales come in below expectations

UK retail sales volumes slipped by 1.5% month-on-month in January, according to the Office for National Statistics (ONS), following a “particularly strong” rise of 2.5% in December. The consensus estimate had been for a drop of 1%.

Capital Economics commented that the drop was "unlikely to herald the start of a consumer spending slowdown", and noted that the January’s level of sales was "still 0.2% above the fourth quarter’s average and 4.3% higher than the same month last year".

For its part, Barclays Research said "increasing consumer purchasing power due to lower prices, combined with improvement in confidence and the general outlook of the economy, will likely support retail sales and consumption in the months ahead".

The ONS also announced that public sector net borrowing in Janaury totalled £4.7bn, indicating a surplus.

However, the ONS cautioned that monthly net borrowing is usually volatile in January and February as a result of the timing of income tax receipts. “A more complete picture of income tax will therefore be available in next month’s statistical bulletin,” it said.

BAE tops the leaders after yesterday's share decline

BAE Systems was regaining some of yesterday's heavy losses, rising into the stop spot by this afternoon. The group suffered a sharp decline on Thursday after it warned that profits could fall by up to 10% on the back of pressures on US government spending, and despite reporting a three per cent increase in operating profits to £1.9bn for 2013.

ARM Holdings climbed after Credit Suisse reiterated its 'outperform' rating on the stock.

Shares in housebuilder Persimmon were also higher after JPMorgan increased its target price on the stock from 1,250p to 1,550p, and reiterated its "overweight" rating.

IMI shares fell after the stock was downgraded to 'underperform' by BNP Paribas.

InterContinental Hotels Group was trading in the red after Credit Suisse lowered its recommendation from ‘neutral’ to ‘underperform’, pointing out that the shares are trading within just 4% of their all-time high at a price-to-earnings ratio of 23.

On the second tier, intellectual property company IP Group soared after announcing plans to float its portfolio company Xeros on the AIM market.

Vesuvius declined after UBS initiated its coverage of the stock with a target price of 440p and a 'sell' recommendation.


FTSE 100 - Risers
Vodafone Group (VOD) 236.50p +3.01%
BAE Systems (BA.) 411.30p +2.72%
ARM Holdings (ARM) 970.00p +2.43%
Persimmon (PSN) 1,464.00p +1.88%
RSA Insurance Group (RSA) 101.20p +1.61%
G4S (GFS) 236.70p +1.41%
Petrofac Ltd. (PFC) 1,379.00p +1.40%
Wolseley (WOS) 3,360.00p +1.30%
Royal Bank of Scotland Group (RBS) 360.10p +1.24%
Hammerson (HMSO) 583.00p +1.22%

FTSE 100 - Fallers
Coca-Cola HBC AG (CDI) (CCH) 1,550.00p -2.82%
InterContinental Hotels Group (IHG) 1,925.00p -2.53%
IMI (IMI) 1,526.00p -2.49%
ITV (ITV) 204.20p -1.73%
Rolls-Royce Holdings (RR.) 995.00p -1.49%
Royal Mail (RMG) 600.00p -1.48%
Kingfisher (KGF) 392.50p -1.36%
Smiths Group (SMIN) 1,373.00p -1.22%
WPP (WPP) 1,343.00p -1.03%
Prudential (PRU) 1,344.00p -0.81%

FTSE 250 - Risers
Centamin (DI) (CEY) 53.60p +6.24%
Playtech (PTEC) 821.00p +4.59%
IP Group (IPO) 222.00p +3.69%
Essentra (ESNT) 876.00p +3.67%
Moneysupermarket.com Group (MONY) 184.00p +3.66%
Hunting (HTG) 847.50p +3.35%
Hikma Pharmaceuticals (HIK) 1,380.00p +3.22%
Ferrexpo (FXPO) 165.10p +3.19%
Millennium & Copthorne Hotels (MLC) 589.00p +3.06%
Fidessa Group (FDSA) 2,534.00p +2.97%

FTSE 250 - Fallers
Daejan Holdings (DJAN) 5,010.00p -2.24%
Fisher (James) & Sons (FSJ) 1,361.00p -2.23%
Vesuvius (VSVS) 461.40p -2.18%
Riverstone Energy Limited (RSE) 901.00p -1.91%
Ted Baker (TED) 2,226.00p -1.81%
Cranswick (CWK) 1,284.00p -1.68%
Booker Group (BOK) 169.00p -1.52%
Electra Private Equity (ELTA) 2,440.00p -1.41%
Diploma (DPLM) 733.00p -1.35%
Oxford Instruments (OXIG) 1,550.00p -1.34%

NR

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