FTSE CLOSE: M&S shares rise despite profit fall

| November 6, 2012 | 0 Comments

By
This Is Money Reporters

03:31 EST, 6 November 2012


|

12:32 EST, 6 November 2012

Marks Spencer was one of the biggest risers on London’s leading shares index today as improved recent trading offered hope of a turnaround.

MS reported a 10 per cent fall in profits to £290 million, but shares rose nearly 3 per cent as the retail bellwether said bolder buying of key fashion trends helped ease declines in non-food sales during the second quarter.

The wider FTSE 100 Index closed 45.8 points higher at 5884.9 in a recovery from yesterday’s declines seen amid investor caution ahead of the US presidential election.

On the up: Despite a fall in profits, shares in Marks  Spencer rose by nearly three per cent due to improved recent trading.

On the up: Despite a fall in profits, shares in Marks Spencer rose by nearly three per cent due to improved recent trading.

Gains came despite disappointing figures for the British economy, with Halifax reporting a 0.7 per cent fall in house prices last month and official data showing a worse-than-expected performance from manufacturers in September.

Output rose 0.1 per cent between August and September, the Office for National Statistics (ONS) said, which was below expectations for a 0.3 per cent rise.

The worse-than-expected data hit the pound which fell against the euro to 1.24. However, sterling was up against the US dollar at 1.59 as the greenback gave up some of yesterday’s gains.

Under-pressure chief executive Marc Bolland revealed a 1.8 per cent fall in like-for-like non-food sales at Marks Spencer in the second quarter – a marked improvement on the 6.8 per cent plunge seen in the first three months. Shares lifted 10.8p to 398.7p.

Other retailers were also on the rise, with BQ owner Kingfisher up 4.7p to 291.7p.

Primark firm Associated British Foods bucked the trend, closing 1p lower at 1365p despite revealing a 17 per cent rise in operating profits to £1.08 billion.

The drop in the share price came after analysts said profits in its sugar division were likely to fall back from the exceptional performance seen in the most recent financial year.

Back in the top tier, embattled security firm G4S was 3 per cent higher as its fight back from the Olympics contract fiasco continued. It reported a pick up in revenues in the third quarter, helping shares lift 9.2p to 270p.

Insurer Resolution was the biggest FTSE 100 riser, up 15.4p to 236.6p, thanks to a broker upgrade and banks were also enjoying gains, led by Lloyds Banking Group up 2.1p to 44.9p.

Chip designer Arm Holdings was higher amid reports that Apple is considering switching the supplier used for desktop computer chips. Shares were up 14.5p to 709.5p.

In the FTSE 250, packaging firm DS Smith was down 4 per cent as broker Investec downgraded the group despite an upbeat trading update, leaving shares 8.2p lower at 206.6p.

The biggest Footsie risers were Resolution up 15.4p at 236.6p, Evraz ahead 13.5p at 255.8p, Lloyds Banking Group up 2.1p at 44.9p and G4S ahead 9.2p at 270p.

The biggest Footsie fallers were Babcock International down 34.5p at 954.5p, Eurasian Natural Resources off 4.4p at 316.9p, Admiral down 14p at 1053p and Standard Chartered off 14.5p at 1468.5p.

15.55: The Dow Jones is enjoying an election day rally, up 91.2 points at 13,203.6.

In London, the FTSE 100 is 36.4 points higher at 5,875.4.

13.30:

Investors have pushed the FTSE 100 34.2 points higher to 5,873.3, but caution reigns as US voters go the polls in a tight presidential election.

Gains came despite disappointing figures for the British economy, with Halifax reporting a 0.7 per cent fall in house prices last month and official data showing a worse-than-expected performance from manufacturers in September.

Manufacturing output rose 0.1 per cent between August and September, the Office for National Statistics (ONS) said, which was below expectations for a 0.3 per cent rise.

Tight election: Result too close to call as Americans head to the polls

Tight election: Result too close to call as Americans head to the polls

Embattled security firm G4S was 2 per cent higher as its fightback from the Olympics contract fiasco continues. It reported a pick-up in revenues in the third quarter, helping shares lift 5.2p to 266p.

Insurer Resolution was the biggest FTSE 100 riser thanks to a broker upgrade and banks were also enjoying gains, led by Lloyds Banking Group up 1.3p to 44.2p.

Chip designer Arm Holdings was higher amid reports that Apple is considering switching the supplier used for desktop computer chips. Shares were up 23.25p to 718.25p.

In the FTSE 250, packaging firm DS Smith was down 3 per cent as broker Investec downgraded the group despite an upbeat trading update, leaving shares 5.7p lower at 209.1p.

Futures point to a positive open on the Dow Jones shortly. US traders are sifting better than expected results from tech giant AOL and retailer Office Depot while the wait for the election result.

On the continent, top French and German markets have made modest gains. Brent crude is trading at $108.31 a barrel and gold is at $1,690.10 an ounce.

10.40:

The FTSE 100 is trading up 27.3 points at 5,866.4 as today’s US presidential election remains too close to call.

The big corporate news on the domestic front was news of improved recent trading at Marks Spencer, which offset a drop in half-year profits and sent its shares up 7.4p to 395.3p. Read more here.

Other retails stocks got a lift, with BQ owner Kingfisher up 4.6p to 291.6p, while in the FTSE 250 JD Sports Fashion was 3 per cent or 27.5p higher at 773.5p.

Primark owner Associated British Foods bucked the trend, falling 6.5p to 1359.5p, after it reported a 17 per cent rise in full-year operating profits to £1.08billion.

Analysts were impressed by the latest figures from Primark but noted that its profits in sugar are likely to fall back from the exceptional performance seen in the most recent financial year.

But the City is mainly preoccupied with the outcome of the tight US elections, including those for the upper and lower Houses of Congress where crunch talks over the ‘fiscal cliff’ are looming.

If US politicians can’t agree to delay or amend massive tax hikes and spending cuts before they are triggered on January 1, the world’s biggest economy could fall into recession next year.

‘Investors remain apprehensive ahead of the closure of the polls in North America today where some predictions say Romney but others say Obama,’ said Angus Campbell of Capital Spreads.

‘It’s too close to call and the worst case scenario would be if we end up with a repeat of the Bush/Gore shenanigans where a President wasn’t declared until early December following recount after recount. A result at the earliest possibility would be welcome so that whoever is elected President can get on dealing with the fiscal cliff as soon as possible.

‘Already in the US over the past few weeks businesses have been holding back on investment in 2013 due to the looming cliff and who would blame them? If you were faced with a recession just round the corner then you wouldn’t want to start hiring people and investing in new stock or machines.

‘Either the can needs to be kicked down the road or a deal needs to be cobbled together quickly in order to avoid a detrimental effect on growth. The problem with such a close race is that a Romney win could lead to more confusion about how the fiscal cliff will be dealt with as he wouldn’t actually get into office until next year anyway, which would mean desperate political battles and most likely the result being the can kicking one.’

Fawad Razaqzada, market strategist at GFT Markets, said: ‘As voters across the US prepare to head to the polls, equity markets are looking relatively subdued in Europe, although the Wall Street futures are eyeing a slightly more bullish start to trade.

‘Essentially the primary hope seems to be that a clear-cut, decisive verdict as to who will be the next president is delivered quickly, avoiding any protracted debate such as the one seen 12 years ago.

‘Once this is in – and the news as to whether Congress remains split – then the action should start again in earnest as investors look to rebalance portfolios accordingly, but in the short term the favoured course of action may well be to keep sitting on the hands.’

8.45: The FTSE 100 is up 6.2 points at 5,845.3, with moves likely to be limited as investors stick to the sidelines on the day of the US presidential election.

Polls show President Barack Obama and Republican challenger Mitt Romney deadlocked in a race that will be decided in a handful of states.

The balance of power in the US Congress will also be at stake in Senate and House of Representatives races that will affect the outcome of ‘fiscal cliff’ talks on $600billion in spending cuts and tax increases.

Unless a
deal is hashed out these will be automatically triggered at the end of
the year – and if they go ahead, the US is expected to plunge into
recession.
More details here.

The Democrats are expected to narrowly hold their Senate majority, while the Republicans are favoured to retain House control.

Debt-stricken
Spain will also be in the spotlight today after newspaper El Pais
reported the European Commission is forecasting a 1.5 per cent decline
in Spanish output in 2013, significantly worse than the 0.5 per cent GDP
contraction forecast by the Spanish government.

The
FTSE 100 ended down 29.49 points at 5,839.06 yesterday. But trading
volumes were thin with investors reluctant to make bold moves before the
U.S. election.

UK retail sales slowed sharply in October as Britons limited to spending to essentials such as food and drink, the British Retail Consortium said, dampening hopes that consumers will drive the economic recovery.

Stocks to watch today include:

Marks Spencer: The bellwether retailer posted a second consecutive year of falling first-half profit, reflecting mistakes in its clothing offer and the pressure facing UK consumers.

Associated British Foods; The Primark owner reported a 17 per cent rise in full-year profit after what it termed an ‘exceptional performance’ in its sugar operations and at its stores.

InterContinental Hotels: The world’s biggest hotelier is opening up talks on the sale of its New York Barclay hotel to a wider group of prospective buyers after holding lengthy exclusive talks with one group, the company said.

The group, which operates the Crowne Plaza, Holiday Inn as well as InterContinental brands, reported operating profit of $167million in the quarter to the end of September, just ahead of consensus forecasts, and up from $153million a year ago.

The comments below have not been moderated.

Our MS in Stockton is a bit on the small side but they still have decent gear. The food section is always nice and clean, and the staff there are very helpful too. Though staff in the general shopping area are a bit thin on the ground.

desertrat
,

Stockton on Tees, United Kingdom,
06/11/2012 15:28

What has MS got to do with the USA Presidential elections? Man lands on Mars!……and Apple launch it’s new iPad. lol

Jetty
,

London, United Kingdom,
06/11/2012 15:22

Regarding MS lower profits, I’ve shopped at MS all my life and find that the current uncaring MS is not the place it used to be.
As well as MS appearing not to care about their customers, I feel that I no longer trust MS to play fair in many areas of their business.
I’ve also seen terrible lack of hygiene in some of their food halls, so I tend to shop elsewhere now.

Skipper
,

London,
06/11/2012 11:11

Regarding MS, I’ve shopped at MS all my life and find that the current uncaring MS is not the place it used to be.
As well as MS appearing not to care about their customers, I feel that I no longer trust MS to play fair in many areas of their business.
I’ve also seen terrible lack of hygiene in some of their food halls, so I tend to shop elsewhere now.

Skipper
,

London,
06/11/2012 10:58

The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline.

Leave a Reply

You must be logged in to post a comment.

Get Adobe Flash player