By This Is Money Reporters
17.30 (CLOSE): Shares in Marks & Spencer have climbed after the high street stalwart announced plans to expand its global footprint with another 250 stores.
The stock rose 2 per cent as it said the overseas push would grow international sales by a quarter and profits by 40 per cent – providing a welcome distraction to ongoing struggles in its domestic UK market.
The wider FTSE 100 Index climbed narrowly, by 6.4 points, to 6659, helped by gains among heavyweight miners after an earthquake off the coast of major copper producer Chile sent metals prices higher.
M&S boost: Shares in the retailer got a lift a day after the firm took analysts to visit its new store in Paris
London’s blue chip share index was also boosted by more record highs set on Wall Street overnight after new signs of life in the US manufacturing sector.
Germany’s Dax and France’s Cac 40 also saw small gains while New York’s Dow Jones Industrial Average was ahead at the time of the close in the City.
On currency markets, sterling held firm at 1.66 US dollars and 1.21 euros.
In London, M&S was up 10.1p to 469.9p after setting out its aims, at an investor and analyst presentation in Paris, to open a raft of stores outside the UK over the next three years, including 20 food stores across the French capital.
But supermarkets Tesco and Morrisons were on the back foot after a gloomy broker note from HSBC on the stocks.
Bradford-based Morrisons shed nearly 2 per cent or 3.6p to 207.2p, while market leader Tesco eased 0.8p lower to 292.6p.
Elsewhere, online retailer ASOS was also in the spotlight after its half-year results confirmed a 22% drop in profits to 20.1 million as it took a hit from expansion costs.
But shares ended 27p up at 5181p after assurances from boss Nick Robertson that the investment programme would double annual sales capacity up to 2.5 billion.
Blue chip insurers were also in the red as major players gave back some of the rises seen in the previous session’s bounce-back amid the furore over the Financial Conduct Authority’s botched announcement of an inquiry into 30 million closed financial policies.
Aviva and Resolution were impacted further after going ex-dividend, meaning new shareholders are no longer entitled to the latest pay-out.
Resolution dropped 5% or 15.3p to 288.4p and Aviva fell 4.3p to 487.8p.
Bus and rail firm FirstGroup slipped 1% or 1.7p to 137.3p in the FTSE 250 after revealing operating profits would be 14 million lower than expected due to recent severe weather conditions, especially in the US where it runs First Student and Greyhound.
Meanwhile, pizza firm Domino’s fell 1.5p to 556p despite a 10.8% surge in like-for-like sales for the first quarter.
Analysts at Panmure Gordon described the performance as “robust” but others at N+1 Singer said they were concerned about a more subdued performance across Germany, Ireland and Switzerland.
The biggest FTSE 100 risers were Fresnillo, up 31p to 877p, Mondi up 32p to 1073p, International Airlines Group up 12p to 436.5p and Randgold Resources up 103p to 4617p.
The biggest FTSE 100 fallers were Resolution, down 15.3p to 288.4p, Pearson down 30p to 1014p, Hargreaves Lansdown off 26p at 1424p and Morrisons down 3.6p to 207.2p.
15.00: The Footsie stayed modestly higher in mid afternoon trade as a subdued session entered its final phase, with gains pinned back by a cautious start from US stocks after a private payrolls report missed expectations, raising slight worries ahead of Friday’s official US jobs report.
With an hour and a half of trading to go, the FTSE 100 index was up 8.7 points at 6,661.3, holding off an earlier three week peak of 6,672.73.
In early deals on Wall Street, the Dow Jones Industrial Average recovered from an opening decline but still only added 12.6 points at 16,545.2, pausing following strong gains yesterday which had been fueled by two positive reports on US manufacturing.
Miners up: The sector got a lift as copper prices rose on supply worries following a major earthquake in Chile
Today’s US data showed that ADP non-farm payrolls rose by 191,000 in March, up from, 178,000 in February but slightly lower than the estimated figure of 192,000.
While the private sector payrolls report is not always a reliable indicator for the official US non-farm payroll numbers, due at the end of the week, they focused investors’ minds on that crucial data.
Sam Fox, financial sales at Spreadex: ‘As we approach the second half of the trading week, investors will begin to ponder upon Fridays all important Non-farm employment change figure which is expected to come in at 199,000.
‘Regardless of the figure, we are sure to see an influx of volatility in global markets throughout Friday afternoon with markets often getting twitchy as the figure looms.’
London shares remained higher thanks mainly to strength in the heavyweight mining sector as copper prices rose to a three week high on expectations of a supply issue after a major earthquake hit South American producer Chile overnight.
12.10: The Footsie held modest gains mid session, supported by strength in the heavyweight miners as copper prices jumped on supply concerns following an enormous earthquake off the coast of Chile which sparked fears of a tsunami.
At lunchtime, the FTSE 100 index was up 10.7 points at 6,661.3.3,albeit off a three-week high struck earlier in the session.
Mining companies were in demand as copper prices hit a three-week high, with Chilean copper miner Antofagasta – ironically – the best off, ahead 16.0p at 855.5p.
The top blue chip gainer, however, was retailer Marks & Spencer which rose 10.6p to 470.4p after the high street stalwart said it is ramping up international expansion plans and it aims to open 250 stores over the next three years.
Ahead of a trading update due next week, M&S’s expansion announcement came as a welcome distraction from their woes in the UK.
But analysts at Shore Capital Stockbrokers were circumspect, saying: ‘M&S needs to keep the food, home, beauty, online and international plates spinning whilst demonstrating ongoing progress in core UK ladieswear. Here progress is undoubtedly being made, but it is glacial.’
Among the blue chip fallers, Pearson, Resolution, Aviva, Tullow Oil and Wolseley all fell today as they traded ‘ex-dividend’, meaning investors will no longer qualify for the latest dividend payouts. The adjustment in their share prices as a result knocked around 3.8 points off the Footsie’s advance.
Also on the downside, Reckitt Reckitt shed 33.0p at 4,873.0p after JP Morgan Cazenove cut its target price for the household products firm to 4,250p from 4,450p.
‘We believe Reckitt is at a strategic turning point with several balance sheet catalysts (RB Pharmaceuticals and over-the-counter OTC M&A). Yet, we believe a lot of these are already positively reflected in the shares’ 25 per cent premium rating to the sector. Conversely any setback on these events could lead to a 10-15 per cent downside, with missing on the OTC deal as the biggest potential risk,’ the bank’s analysts said in a note.
Supermarket group William Morrison was the biggest FTSE 100 faller, down 4.6p to 206.2p, while Tesco shed 0.3p at 293.1p as HSBC cut price targets for both firms amid fears of slowing growth and possible price wars.
HSBC decreased its target for Tesco to 260p from 300p as it reduced its earnings forecasts ahead of annual figures due to be announced on April 16. For Morrisons, HSBC cut its target price to 160p from 200p.
On the second line, transport operator Firstgroup was weak after a trading update, losing 1,8p at 137.2p a day after falls in reaction to a downgrade in rating by Bank of America Merrill Lynch.
The bus and rail group said operating profits for the year would be 14m lower than expected due to recent severe weather conditions, especially in the US which affected its Greyhound operations, while its UK rail business was also hit by flooding.
But on the upside, engineering contractor Amec – which recently launched a 2billion takeover of Swiss rival Foster Wheeler – added 29p to 1,200p after Morgan Stanley raised its rating to equal-weight form underweight and hiked its price target to 1,235p from 1,100p.
‘We see a positively skewed risk-reward around [Amec’s] firm offer for Foster Wheeler. We expect the stock to re-rate as the deal completion becomes likely due to potential synergies. Alternatively, we believe the deal not progressing could trigger a 400million buyback,’ Morgan Stanley analysts’ said in a note.
And further down the food chain, Edinburgh-based software provider, Craneware, rose 12.5p to 540p on news it has the signed two significant new contracts for its revenue cycle software with large US hospital groups.
The deals, worth $ 3.8million and $ 3.1million respectively, add to a third contract secured earlier in the year.
09.40: London shares ticked higher but struggled to make much headway today despite more record highs set on Wall Street overnight after new signs of life in the US manufacturing sector, with traders focused on key US jobs data due on Friday.
In early morning trade, the FTSE 100 index was up 5.1 points at 6,657.7, below an opening high but recovering following an earlier slip into the red.
On Wall Street last night, the Standard & Poor’s 500 Index closed at another all time high after two positive reports on US manufacturing, and markets in Asia followed suit by also gaining ground.
US lead: The Footsie was supported by overnight gains on Wall Street and advances today in Asia
In London, Marks & Spencer was a focus, 2 per cent or 8.4p higher at 468.2p after the retail giant revealed plans to open 250 new stores outside the UK in the next three years as part of a major global expansion drive.
The announcement, made at an investor and analyst presentation in Paris yesterday, included aims to increase international sales by a quarter and overseas profits by 40 per cent.
Online retailer ASOS was also in the spotlight after its half-year results confirmed a 22 per cent drop in profits to 20.1million as it took a hit from expansion costs.
ASOS shares rose 48.5p to 5,202.5p, as the figures came in line with expectations after ASOS recently warned over the impact of its investment programme.
But blue chip insurers were back in the red, giving up some of yesterday’s bounce-back amid a furore over the Financial Conduct Authority’s botched announcement of an inquiry into 30 million closed financial policies.
The impact of the FCA inquiry remained in sharp focus, although major players such as Aviva and Resolution were also impacted after going ex-dividend, meaning new shareholders are no longer entitled to the latest pay-out.
Resolution dropped 9.1p to 294.6p and Aviva fell 3.1p to 489.1p.
08.30: The FTSE 100 has opened 7.9 points higher at 6,660.4, buoyed by further evidence of a pick-up in US economic growth.
Manufacturing across the Atlantic got a boost in March, accelerating for a second straight month, according to figures from the Institute for Supply Management.
It is the latest US update to point to underlying strength in the giant economy after a string of underwhelming releases following a cold snap over the winter, and the news helped stocks around the world to rally.
Economy watch: Latest releases show underlying strength in the giant US economy after a string of underwhelming updates following a cold snap over the winter
On a thin day for European data and corporate releases, investors will scan US durable goods orders and employment numbers, attempting to gauge the strength of growth ahead of the influential non-farm payrolls jobs report this Friday.
UK construction data for March will be released later. The FTSE 100 closed up 54.2 points at 6,652.6 yesterday.
Stocks to watch today include:
BP: The oil major will cease production at its Bulwer Island refinery in Brisbane, Australia, by mid 2015. It blamed competition from new mega-refineries in Asia that are cheaper to operate.
GLAXOSMITHKLINE: The company’s AIDS drugs business is to add one of its latest HIV medicines to a patent pool, cutting its future price for developing countries and pooling intellectual property rights.
ANGLO AMERICAN: The chief executive of Anglo American, one of the world’s largest diversified miners, said divesting the strike-afflicted platinum division could be an option if it does not perform as well as the others.
HSBC: The bank has made some progress in improving its anti-money laundering programme as required by a 2012 deferred prosecution agreement with the US Justice Department, but there remains ‘much work to be done’, federal prosecutors said in a court filing.