Marks and Spencer drives retail surge as Footsie pushes forward

FTSE: 6,041.13 (+34.07) Mid-250: 11,781.37 (+43.71) Small Cap: 3,275.97 (+23.01):THE FTSE 100 made further progress over the 6,000-point mark yesterday, with retailers in the lead after a well-received update from Marks and Spencer.

The high-street bellwether’s shares rose 6 per cent to 360.7p and the top of London’s benchmark index after its fourth-quarter sales beat forecasts, with revenue from established outlets up 0.1 per cent, defying fears of a fall.

The stock was in demand even as MS warned it was looking ahead to trading in 2011 with caution, citing “pressure on consumers’ disposable incomes and higher commodity prices”, and forecasting an “increasingly challenging” year.

Eithne O’Leary at Oriel Securities said: “Management is understandably cautious about the outlook but remains confident that improved range architecture will drive further market share gains.

“In a retail sector weighed down by increasing consumer gloom, this morning’s statement from MS comes as a relief,” she said.

The numbers looked robust enough to bring other retailers on to the FTSE 100’s leaderboard. Next rose 3.2 per cent to £20.95, J Sainsbury added 1.3 per cent to 337p and Tesco was 0.8 per cent higher at 393.1p.

Overall, London’s benchmark index moved back over the flatline, rising 34 points to 6,041.13, a rise of 0.6 per cent.

The trend was the same on the FTSE 250, where retailers made up a strong portion of the gains. Kesa Electricals rose 0.7 per cent to 112.7p.

Dixons was 2 per cent higher at 12.03p and Home Retail was 1.4 per cent higher at 210.85p. The mid-cap index rose 43 points to 11,781.37, a gain of 0.4 per cent.

Back on the FTSE 100, sentiment toward banks improved with news from Frankfurt that Commerzbank intended to raise capital in order to repay €14.3 billion it received in state aid during the financial crisis.

Although the prospect of further capital raisings hit its own stock and shares in its compatriots, the latest sign of consistent progress away from the financial crisis lifted the wider mood.

HSBC, Europe’s biggest bank by market value, rose 2 per cent to 660.4p.

Lloyds was 3.9 per cent higher at 61.97p. Royal Bank of Scotland was 2.7 per cent higher at 42.77p.

Barclays added 2.8 per cent to 294.83p. – (Copyright The Financial Times Limited 2011)