By This Is Money Reporters
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17.30 (CLOSE): Sports Direct extended its strong run on the stock market today after confirming details of a bonus scheme that could see its founder land a shares windfall worth up to 65million.
The proposed award for Newcastle United owner Mike Ashley is dependent on the retailer achieving earnings of 330million in this financial year and 410million in 2015, compared with the 287.9million recorded in the year to July.
Sports Direct leapt to the top of the FTSE 100 Index as the targets impressed investors, although the wider top tier remained in the red with a 3.9 point fall to 6685.5.
Reason to smile: Sports Direct today set out plans to hand its founder, Mike Ashley a shares windfall worth a potential 65million.
Global markets, and mining stocks in particular, have been shaken by weaker-than-expected trade figures from China, which have raised fears about demand from the world’s second largest economy.
There was little momentum provided from across the Atlantic as the Dow Jones Industrial Average on Wall Street drifted around 25 points lower in lacklustre early session trading.
The pound failed to strengthen after slipping yesterday against the dollar and the euro, with interest rates in the spotlight again today as Bank of England governor Mark Carney stressed to MPs that rates will only rise gradually given current spare capacity in the economy. Sterling remained at 1.66 US dollars and 1.20 euros.
Banks were among the biggest fallers on the FTSE 100, with Royal Bank of Scotland leading declines with a 9.6p drop to 310.2p.
And Tesco and Morrisons slipped after industry market share figures from Kantar Worldpanel showed further declines.
Tesco dropped 5.6p to 314.7p after its share fell to 28.7 per cent in the 12 weeks to March 2 – its lowest level in more than nine years – while Morrisons also suffered amid heightened worries ahead of its annual results this week, down 2.9p to 230.8p.
The figures showed its sales declined by 3.2 per cent, leaving its market share at 11.1 per cent compared with 11.8 per cent a year earlier. Analysts expect the struggling chain will report a 13 per cent drop in underlying profits to 787million.
But Sports Direct was enjoying better fortunes with its 4 per cent or 29p hike to 839p, while a number of other retail stocks were also on the front foot.
They included high street stalwart Next, which added 150p to 6745p as investors geared up for the company’s annual results next week.
Rolls-Royce rose for a second session in a row after Friday’s news that the engine giant is to buy Daimler’s stake in a power controls joint venture formerly known as Tognum. Shares lifted 1 per cent or 9p to 1052p.
The biggest FTSE 100 risers were Sports Direct International up 29p to 838p, Aviva 14p ahead at 523.5p, International Airlines Group 10.9p higher at 444p, and Reckitt Benckiser 113p stronger at 4953p.
The biggest FTSE 100 fallers were Royal Bank of Scotland down 9.6p to 310.2p, Johnson Matthey 92p lower at 3096p, Barclays off 5.9p to 236.2p and Antofagasta 18.5p down at 840p.
16.00: The Footsie clung on to modest gains in late afternoon trade as US stocks put in a volatile early performance, dropping back after an initial rally from opening falls.
With half an hour of trading to go, the FTSE 100 index was up 10.0 points at 6,699.5, drifting back again from its best levels for the day.
On Wall Street, the Dow Jones Industrial Average turned down 20.2 points at 16,398.5, with the market searching for fresh direction after some mixed economic data today.
Not clear: The Footsie managed to hold modest gains late on, but US stocks fell back as an early rally stalled
US wholesale inventories rose in January, but wholesale sales fell, the Commerce Department said on Tuesday.
In London, Aviva continued its recent strong performance following last week’s results, adding 15.5p to 525.0p supported by an upgrade in rating from RBC Capital to sector performer from underperform, with the broker also hiking its target price for the insurer to 550p from 440p.
‘A return to top-line life growth and a relentless drive to improve efficiency by an impressive management team lead us to increase our target price and upgrade to sector perform,’ RBC’s analysts said in a note.
Household products group Reckitt Benckiser also saw good demand, up 127.0p to 4,967.0p after it yesterday acquired lubricants brand K-Y from US firm Johnson & Johnson.
Analysts at Bank of America Merrill Lynch think there is a good chance of Reckitt making further acquisitions, and estimate the company could have up to 12billion of firepower at its disposal.
Merrill Lynch repeated its buy rating on Reckitt note with a 5,600p target price.
Miners put in a mixed showing today after sharp falls in the previous two sessions as investors remained cautious over a possible slowdown in China, a key consumer of metals.
Blue chip Rio Tinto rallied 47.0p higher to 3,186.5p, while Anglo American recovered 19.0p at 1,452.0p.
But mid cap African Barrick Gold was sharply lower, down 46.7p to 261.4p, after its majority shareholder sold a 10 per cent stake.
Canada’s Barrick Gold raised nearly 113million by disposing of 41million shares at 275p each, although it is still left with a majority 64 per cent stake in African Barrick.
Also among the day’s fallers, banks were weak with Royal Bank of Scotland 4.3p lower at 315.5p impacted by a reduce recommendation from broker Nomura.
13.40: London shares were marginally higher at lunchtime, as the Footsie steadied after recent volatile performances led by Sports Direct, although gains were constrained by underlying concerns about the situation in Ukraine and slowing growth in China.
The FTSE index was up 3.1 points at 6,692.5, recovering from a session low of 6,660.6 but unable to return to an opening high of 6,714.0.
Global markets, and mining stocks in particular, have been shaken in the past few sessions by weaker-than-expected trade figures from China, which have raised fears about demand from the world’s second largest economy.
The sector showed some signs of stabilising today, with Anglo American up 15.5p at 1,448.5p and Rio Tinto 27.25p higher at 3,166.75p.
Barclays and Royal Bank of Scotland occupied the top two positions on the blue chip fallers board with declines of 7.1p to 234.8p and 6.75p to 313.1p respectively.
And supermarket group William Morrison slipped 3.5p lower to 230.2p after industry market share figures from Kantar Worldpanel heightened worries ahead of its annual results this week.
Morrison’s sales declined by 3.2 per cent in the 12 weeks to March 2, leaving its market share at 11.1 per cent compared with 11.8 per cent a year earlier.
Analysts expect the struggling food retail chain will report a 13 per cent drop in underlying profits to 787million.
But elsewhere on the high street, Sports Direct continued its rapid ascent in the FTSE 100 today as it set out plans to hand its founder, Mike Ashley a shares windfall worth a potential 65million.
The proposed award for Ashley is dependent on the company achieving earnings of 330million in this financial year and 410million in 2015, compared with the 287million recorded in the year to July.
The targets impressed investors as Sports Direct shares set the blue chip pace, with the recent top flight newcomer up nearly 4 per cent or 29.5p to 838.5p.
Alongside Sports Direct, which has climbed in value from 2billion in 2012 to nearly 5billion today, a number of other retail stocks were on the front foot.
They included high street stalwart Next, which added 62.5p to 6657.5p as investors geared up for the company’s annual results next week.
Rolls-Royce rose for a second session in a row after Friday’s news that the engine giant is to buy Daimler’s stake in a power controls joint venture formerly known as Tognum, with its shares up another 10.5p to 1,053.5p.
It was joined on the risers board by Aviva as appetite for shares in the insurer showed no signs of easing after its well-received results on Thursday.
The stock, which has risen to a five-year high, was up another 11.75p to 521.5p.
10.10: The Footsie saw opening gains quickly evaporate today, with the index extending the falls that pushed it to a 3-week low yesterday as mining stocks remained cautious following weak export data at the weekend from top metals consumer China.
By midmorning, the FTSE 100 index was down 21.4 points at 6,668.0 having inched higher in early deals.
The Footsie, which rose 14.4 percent in 2013 to post its best yearly gain since 2009, has been pegged back over the last month by a weaker mining sector amid recurring signs of a possible economic slowdown in China.
Back down: The Footsie saw its early gains reversed as sentiment stayed cautious
Persistent pressure due to worries over tensions between Ukraine and Russia, after Russia’s effective seizure of Ukraine’s Crimea region in late February also remained a depressant.
Losses by the miners were less pronounced than in the previous two sessions but the mood still remained dull, with Chilean copper miner Antofagasta shedding 19.0p at 858.0p and Anglo American down 17.0p at 1,445.5p.
Broker UBS stayed cautious on the prospects for the mining sector, due to the risks of further metals price falls.
‘Our commodity team expects iron ore and copper prices to fall materially in 2014-2015 on increased supply,’ UBS analysts said in a research note.
Market heavyweight Vodafone was the top blue chip faller, down 11.1p at 227.6p as it continued to be linked to a possible 7 billion euros (5.8billion) deal to buy Spain’s Ono.
Banks were also weak, with Barclays down 12.6p at 235.8p as eurozone governments move closer towards a deal on how to wind down failing banks.
Negotiations are set to last until tomorrow and may be the final step in a European banking union that would mean one supervisor for eurozone banks.
Among the minority blue chip gainers, engine giant Rolls-Royce was in demand again, up 30.4p at 1,056.4p as investors continued to applaud Friday’s news that the firm is to buy Daimler’s stake in a power controls joint venture, formerly known as Tognum.
Retailer Next also attracted attention up 130.0p to 6,680.0p on expectations that the firm’s strong online presence will have benefited it although the high street saw a drop in sales in February.
Retailers said sales fell by an average of 1 per cent in the month compared to a year earlier and declined for the first time in nearly a year, the British Retail Consortium said, blaming the torrential rain which left half of Britain underwater.
Online retailers however continued to do well, with online non-food sales increasing by 14.3 per cent compared to 12.3 per cent in the same month last year.
But there was better news from Britain’s manufacturers, which started 2014 on a solid footing in January although bad weather caused the broader measure of growth in industrial output to slow sharply, according to official data.
Manufacturing output grew by 0.4 percent in January from December – despite a big fall in output in the pharmaceutical industry – and was 3.3 percent higher than in the same month last year, the Office for National Statistics said.
Economists had expected a month-on-month rise of 0.3 per cent and a 3.3 per cent increase for the year. Overall industrial output, which includes power generation and Britain’s North Sea oil production as well as manufacturing, only climbed 0.1 per cent on the month, a sharp slowdown from growth of 0.5 per cent in December, slightly weaker than a forecast of 0.2 per cent growth.
08.30: The FTSE 100 has opened up 16.4 points at 6,705.8, reversing the previous session’s losses despite the ongoing crisis in Ukraine and worries over the pace of growth in China.
The confrontation in the Crimea peninsula in the Black Sea showed no sign of easing, with a pro-Russian force opening fire when seizing a Ukrainian military base there yesterday and NATO announcing reconnaissance flights along the eastern frontiers.
Concerns about the economic health of top metals consumer China have been fuelled by recent data showing a sharp drop in the country’s exports, and also continue to weigh on investor sentiment.
Market watch: Tensions in the Crimea are worrying traders
Banking stocks will be in the spotlight as eurozone governments move closer towards a deal on how to wind down failing banks.
Negotiations are set to last until tomorrow and may be the final step in a European banking union that would mean one supervisor for eurozone banks, one set of rules to close or restructure those in trouble and one pot of money to pay for it.
The FTSE 100 closed down 23.22 points at 6,689.45 yesterday, marking its lowest closing level since it ended at 6,663.62 points on February 14.
Stocks to watch today include:
BARRATT DEVELOPMENTS/DIXONS: Housebuilder Barratt has appointed Dixons’ current chairman John Allan as its chairman designate.
CLOSE BROTHERS: Financial services group Close Brothers Group posted a 21 per cent rise in first-half operating profit driven by increased lending at its core banking division.
COMPUTACENTER: Computacenter, a company which provides IT infrastructure services, reported a 3 per cent rise in full-year pre-tax profit.
FOXTONS: Estate agent Foxtons posted a 57 per cent rise in annual pre-tax profits.
INCHCAPE: Car dealer Inchcape reported higher profits and raised its dividend.
SPORTS DIRECT: Sportswear retailer Sports Direct proposed a share award scheme for boss Mike Ashley.
ST IVES: Marketing services group St Ives reported higher interim pre-tax profits and said it was confident of further progress for the full-year.
BHP BILLITON: The mining company said forecasts for iron ore prices to fall as low as $ 80 a tonne appeared low, despite the market moving into oversupply this year.