By This Is Money Reporters

PUBLISHED: 03:38 EST, 19 February 2014 | UPDATED: 12:34 EST, 19 February 2014

17.30 (CLOSE): Retailer Sports Direct International rallied higher today after a buoyant trading update saw it buck lacklustre trading on the wider FTSE 100 Index.

The sportswear chain, which is controlled by Newcastle United owner Mike Ashley, was the biggest riser in the top tier as shares rose 7 per cent after it overcame testing year-on-year comparisons to report an 11 per cent leap in sales for the 13 weeks to the end of January.

Investors paused for breath on the FTSE 100 Index, which edged 0.3 points higher to close at 6796.7, after robust gains in the previous two sessions.

Scoring gains: Sports Direct was the top FTSE 100 riser after it issued a buoyant trading update

The Dow Jones Industrial Average on Wall Street rose around 50 points in cautious early trading ahead of minutes of the last Federal Reserve policy meeting.

UK investors were left digesting official figures showing that while unemployment continued to fall – to 2.34 million in the final quarter of last year – the jobless rate rose unexpectedly to 7.2 per cent.

Economists said the rise in the rate bolstered the Bank of England’s case for keeping the cost of borrowing at record lows.

Meanwhile, minutes of the Bank’s last rates meeting confirmed its view that rates should remain on hold to cement the recovery and indicated unanimous support for its second phase of forward guidance, despite no vote being held on the policy.

The pound held firm even though today’s unemployment figures boosted the case for rates to remain on hold.

Sterling clung to its four year high against the US dollar, at 1.67 dollars, and stood at 1.21 euros.

Among stocks, Sports Direct powered ahead with a 51p gain to 767p as its update came as a relief to investors following disappointment over half-year results in December.

Its cheer rubbed off on rival JD Sports Fashion in the FTSE 250 Index, which gained 6% or 80p to 1450p.

In a strong session for retailers, Marks & Spencer was also on the front foot following bullish broker comments in light of its new website launch this week.

Jefferies said the retailer’s new site was “impressive” as it upgraded the stock from hold to buy, helping M&S shares lift 4.7p to 501p.

BAE Systems lost early session gains despite saying it had finally agreed pricing terms with Saudi Arabia on a long-running deal for 72 Typhoon aircraft.

It said the terms of the agreement were broadly consistent with the company’s previous trading outlook for 2013, but shares closed 0.8p lower at 436.8p.

Elsewhere, builder Galliford Try made headway in the second tier after it announced plans to ramp up construction and more than double annual earnings by 2018 following record half-year profits.

The group posted an 18 per cent hike in profits to 38.1million in the six months to the end of December and said it had secured a 400million refinancing deal to help fund expansion as it predicts the property market will continue to improve, backed by the Government’s Help to Buy initiative.

Shares rose 4 per cent or 48p to 1215p.

The biggest FTSE 100 risers were Sports Direct International up 51p to 767p, Morrisons ahead 11.4p to 244p, Fresnillo 24p higher at 992p and Rolls-Royce 23.5p stronger at 1000p.

The biggest FTSE 100 fallers were AstraZeneca down 105.5p to 3987p, Carnival off 54p to 2468p, Barclays 5.5p weaker at 255.8p and Persimmon 27p lower at 1417p.

15.00: The Footsie nursed its losses in late afternoon trade, retreating after a recent run of gains with a modest opening rise on Wall Street failing to stir a London market weighed down by stocks trading without entitlement to the latest dividend payouts.

With an hour and half of trading to go, the FTSE 100 index was 20.4 points lower at 6,776.0, although stocks trading ex-dividend today accounted for 14 points of that decline.

US stocks headed higher today ahead of the release of minutes from the Federal Reserve’s most recent policy meeting, with the Dow Jones Industrial Average gaining 43.2 points at 16,173.6 in opening deals.

US up: New York stocks pushed higher in opening deals today but the Footsie remained stubbornly lower

Takeover news gave Wall Street a boost, with jeweller Zale seeing its share jump more than 40 per cent higher on news that it will be bought out by UK-listed rival Signet.

Signet has offered $ 21 a share, a 41 per cent premium over where Zale shares closed yesterday.
Signet shares in London leapt 16 per cent higher on the news, up 13.1p to 92.2p.

Investors brushed aside further weak US housing data which backed up expectations that the Federal Reserve’s monetary policy will remain loose for some time to come.

US housing starts recorded their biggest drop in almost three years in January reflecting the harsh winter weather across North America, although the third month of declines also pointed to some underlying weakness in the housing market.

The data was among a slew of recent economic reports impacted by the severe US winter, including yesterday’s US February homebuilder confidence index which saw its largest one-month drop.

Separate data today showed US producer prices rose for a second straight month in January, pushed up by an increase in the cost of goods, but there was little sign of a broad pick-up in inflation pressures at the factory gate.

The US central bank will release minutes of its January policy meeting at 7 pm today, at which it decided to further trim its equity supportive monthly bond buying programme.

Minutes from the Bank of England’s latest Monetary Policy Committee meeting, unveiled this morning, failed to have much of an impact in London, and neither did news that UK unemployment, surprisingly, ticked higher in the three months to December.

Andrew Goodwin, senior economic adviser to the EY ITEM Club said: ‘The small uptick in unemployment is not a game-changer, with rising vacancies and employment growth suggesting there is still plenty of life in the labour market.

‘The improvement in the jobs situation continues to contrast sharply against the slow pace of wage growth, which underscores the continued need for a supportive monetary stance.

‘We expect the unemployment rate to resume its descent in the coming months, albeit at a more gradual pace.’

13.25: The Footsie fell further back at lunchtime as the market paused for breath after recent solid gains, which had seen the top tier recoup all the losses endured in a difficult start to the year.

A surprise rise in the UK jobless rate failed to lift the market although it bolstered the Bank of England’s case for keeping UK interest rates at record lows, with traders worried it could point a ‘speed bump; in the UK economic recovery.

Around midsession, the FTSE 100 index was down 31.5 points at 6,764.9 point having hit its highest since late January at 6,810.5 earlier in the day. The weakness followed a rally of around 6 per cent since early February.

Firms trading without the attraction of their latest dividend payout knocked a hefty 14 points off the index, including  AstraZeneca, Barclays, Carnival, and GlaxoSmithKline.

London shares have outperformed the rest of the Europe as stronger mining stocks have contributed to rises of around 1 per cent in both of the previous two sessions this week.

But the FTSE 100 was in a more subdued mood today, mirroring falls by the Dax 30 in Germany and CAC 40 in France.

UK investors were digesting official figures showing that while unemployment is continuing to fall – to 2.34 million in the final quarter of last year – the jobless rate rose unexpectedly to 7.2 per cent in the three months to December.

The rise in the unemployment rate was the first since March last year when it ticked up to 7.8 per cent.

Anita Paluch, trader at Varengold Bank said: ‘The falling trend in the UK unemployment, that have ignited a debate as to whether interest rates need to be adjusted accordingly, has surprisingly encountered a speed bump as it the latest number show a rise to 7.2 per cent, which obviously may open a whole lot of questions about the speed and quality of recovery.’

Retailer Sports Direct International was the top blue chip gainer today, with its saw shares jump nearly 7 per cent higher as it overcame testing year-on-year comparisons to report an 11 per cent leap in sales.

Shares in Britain’s biggest sportswear chain, which is controlled by Newcastle United owner Mike Ashley, powered ahead with a 48.3p gain to 764.2p as its buoyant update for the 13 weeks to the end of January came as a relief to investors following disappointment over half-year results in December.

Sports Direct’s cheer rubbed off on rival JD Sports Fashion in the FTSE 250 Index, which gained 40.0p to 1,410.0p.

Marks & Spencer was another retailer on the front foot following bullish broker comments in light of its new website launch this week.

Broker Jefferies International said the retailer’s new site was ‘impressive’ as it upgraded the stock from hold to buy, helping M&S shares add 5.6p to 501.9p.

Defence contractor BAE Systems was also in demand after it said it had finally agreed pricing terms with Saudi Arabia on a long-running deal for 72 Typhoon aircraft, one day ahead of the publication of its annual results which had been seen as a key date for the agreement.

BAE shares were 4.0p higher at 441.6p as it said the terms of the agreement were broadly consistent with the company’s previous trading outlook for 2013.

Fellow defence form Rolls-Royce was also a top FTSE 100 gainer today, rallying after sharp falls last week after the engine maker warned that sharp cuts in defence spending by US and European governments would mean that its 2014 profits and revenues won’t grow for the first time in 10 year.

Rolls-Royce shares added 23.5p at 1,000.0p helped by the good news for BAE.

Further down the food chain, builder Galliford Try was making headway in the second tier after it announced plans to ramp up construction and more than double annual earnings by 2018 following record half-year profits.

The group posted an 18 per cent hike in profits to 38.1million in the six months to the end of December and said it had secured a 400million refinancing deal to help fund expansion as it predicts the property market will continue to improve, backed by the Government’s Help to Buy initiative.

Galliford Try shares rose 46.0p to 1,213.0p.

09.25: The FTSE 100 Index stuck close to its opening mark in early morning trade today as investors appeared content to sit on the gains seen since the start of the week.

The FTSE 100 Index was 3.4 points lower at 6,793.1, although stocks trading ex-dividend today knocked 14 points off the blue chip index.

London shares have outperformed the rest of the Europe recently as stronger mining stocks have contributed to rises of around 1 per cent in both sessions this week.

Unemployment fall: he release of UK jobless numbers today will have less significance folllowing the Bank of England’s forward guidance changes last week

Sports Direct International shares set a strong pace at the top of the blue-chip risers board today as it overcame testing year-on-year comparisons to report an 11 per cent improvement in sales for the 13 weeks to the end of January.

The update came as a relief to investors following disappointment over half-year results in December. Shares were 36.25p higher at 752.25p.

Other retailers on the risers board included Marks & Spencer, which added 8.95p to 505.25p, and supermarket Tesco up 4.6p to 334.3p.

BAE Systems rose after it said it had finally agreed pricing terms with Saudi Arabia on a long-running deal for 72 Typhoon aircraft.

BAE shares were 7.9p higher at 445.5p as it said the terms of the agreement were broadly consistent with the company’s previous trading outlook for 2013.

Trading was also subdued ahead of the latest UK unemployment data and minutes from the last Bank of England Monetary Policy Committee (MPC) meeting, both due at 9.30 am.

Mic Mills, head of operations at Tradenext Limited said: ‘The FTSE looks set to continue its rise today with the MPC minutes likely to echo Governor Carney’s comments that the focus is now inflation rather than unemployment, so the jobless figures today have lost most of their significance.

‘Although the headline 1.9 per cent inflation figure is still significantly higher than Continental Europe indicating there are still price pressures and with the MPC likely to restate there is continuing weakness in the economy any rate hikes are still some way off.

‘Markets are likely to react quite strongly this afternoon on any weaknesses in the raft of data due out of the States, and how much the ‘polar vortex’ has altered the figures,’ Mills added.

US January producer prices and housing starts numbers will be released today.

08.35: The Footsie eased back in early deals this morning, retreating after strong gains in the two previous sessions this week although a big batch of stocks trading ex-dividend accounted for all of the losses.

In opening deals, the FTSE 100 index was 6.0 points lower at 6,790.4 having added 60.43 points yesterday to help erase all the losses made so far this year having gained in nine of the last 10 sessions.

Blue chip stocks trading without entitlement to the latest dividend payment knocked 14 points off the FTSE 100 index today, with AstraZeneca, Barclays, Carnival Cruises, GlaxoSmithKline and Reckitt Benckiser all ex-dividend.

Dip back: The Footsie was lower in opening deals as ex-dividend stocks weighed

Traders were also cautious ahead of the latest UK unemployment numbers at minutes from February’s Bank of England Monetary Policy Committee meeting, both due at 9.30 am.

However, given, the Bank’s move in last week’s quarterly inflation report to substantially altered its controversial forward guidance policy, meaning interest rates are now less directly linked to unemployment, the jobless data could have less of an impact than it has had recently.

The old policy made an unemployment rate of 7 per cent the benchmark that would allow any possible interest rate rise – a level the Bank did not expect to be achieved until 2016. But unemployment has plummeted in recent months, with official figures in February showing the jobless rate at 7.1 per cent.

Michael Hewson, chief market analyst at CMC Markets (UK) said: ‘Expectations for December are for the unemployment level to remain unchanged at 7.1 per cent, but in my opinion there is a risk we could see the unemployment rate increase slightly.

‘It was only in October that the rate was at 7.7 per cent and unemployment levels never fall in a straight line.

‘Given that the rate is calculated using a three month average it seems more likely that we could see the rate tick higher for no other reason than the one month November number came in at 7.4 per cent. Factor in the October rate at 7 per cent and we would need to see the December number come in below 7 per cent to even get close to 7.1 per cent, which suggests that unless December was a particularly good month then the odds could well favour a slight increase, which could send the pound on a trip lower.

‘We also have the latest Bank of England minutes and if MPC member David Miles’ comments earlier this week were any guide there could well be some differences of opinion with respect to the amount of slack in the economy, and the possible timing of any potential rise in interest rates, along with any insights into the debate went into the new guidance guidelines announced last week,’ Hewson added.

After the London market close, minutes will also be released from the Federal Reserve FOMC meeting at the end of January, when the US central bank announced the second instalment of the tapering of its bond-buying programme.

‘The minutes could well give an insight into how high the proverbial bar needs to be to prevent a further taper in four weeks time when the Fed meets in March, when Fed officials will have had an additional two extra jobs reports to mull over,’ Hewson said.

‘This is likely to be particularly instructive given how disappointing some of the recent economic data has been in recent weeks, and while Fed Chair Janet Yellen didn’t offer too many clues last week it could be instructive to find out whether any Fed officials were concerned that the recent bad weather might be masking a deeper concern about the recent slowdown in economic data.’

Stocks to Watch include:

VODAFONE GROUP – Vodafone said on Wednesday shareholders would receive 0.026 shares in Verizon Communications for each Vodafone share they own as part of their payout for the $ 130billion sale of the group’s stake in Verizon Wireless

SPORTS DIRECT – Britain’s biggest sporting goods retailer posted a 14.6 per cent rise in profit in its Christmas quarter and said it was confident of hitting its full-year target.

ROYAL MAIL GROUP – Britain’s second-biggest postal company TNT Post is to double its London workforce to 2,000 this year as it steps up its challenge to the dominance of Royal Mail.

BARCLAYS – The U.S. Federal Reserve on Tuesday released the final version of tight new capital rules for foreign banks, giving them a year longer to meet the standard and applying it to fewer banks than in a first draft.

STANDARD CHARTERED – The bank is seeking buyers for its Hong Kong consumer finance business, in a deal worth $ 500million to $ 700million, people familiar with the matter told Reuters on Wednesday.

ROYAL DUTCH SHELL – The oil major has sold its downstream Australian assets to Dutch-owned oil trader Vitol and the Abu Dhabi Investment Council for about $ 2.2 billion, The Australian Financial Review reported on Wednesday.