London close: Footsie thunders ahead

11th Oct 2012 16:54

Better than expected US jobless figures gave a little early afternoon boost to a London market already going along nicely, as investors shrugged off a downgrade of Spain's credit rating by S&P, leaving the Iberian nation's debt status barely above a junk rating.Initial weekly unemployment claims dropped by 30,000 to 339,000 last week in the US. The market had been expecting a reading of 370,000. However, and as economists at Barclays Research are pointing out: "A report by Market News International suggests that the unexpectedly sharp decline in initial claims in the week ending October 6th may have been due to one "large" state delaying its re-certification process, resulting in a smaller increase in unadjusted claims relative to what historical seasonal patterns would suggest."Nevertheless, these same economists added that: "Overall, even when accounting for what appears to be a technically driven decline in this week's initial jobless claims, the longer-term trend in initial claims is suggestive of a modest improvement in labour market conditions." For its part, Bloomberg reported that the EU might postpone the implementation of the Basel III bank capital rules. Back in fashionBurberry, the luxury fashion chain, led the way, as it said disappointing like-for-like sales growth in the July-September quarter started to pick up in September. Burberry also had good news on the operating margin front, saying the Retail/wholesale operating margin in the six months to September 30th 2012 is now expected to be at least in line with the same period last year (14.9%), rather than lower as previously guided. Elsewhere in the world of retail investors were far from sanguine about the impending departure of Kate Swann, the Chief Executive Officer of newsagent chain WH Smith.The share price fall is recognition of how well Swann has maximised returns from what was considered at the onset of her stewardship a cash cow with little growth potential. She will leave the company on June 30th 2013 after nine years as boss and will be replaced by Steve Clarke, Managing Director of the firm's high street business.Swann is the second high profile women boss in recent weeks to jack it in; just over a week ago Marjorie Scardino, the Chief Executive Officer of publishing group Pearson decided to call it quits at the end of the year. Mining firm Kenmare Resources flagged after it said its markets remained weak, though it is confident of a pick up in the medium term.Greggs, the hot pastry-based snack dispenser of choice for British politicians seeking a photo-opportunity, left a sour taste after it said LFL sales will remain negative in the final quarter of 2012.LFL sales fell 2.6% year-on-year in the 14 weeks to October 6th as consumers continued to tighten their purse strings. Rising ingredient costs are also a concern, the group revealed.Supermarket chain Morrisons was friendless after Credit Suisse downgraded to a neutral stance, having previously expecting the shares to out-perform. Market research from Kantar Worldpanel suggests Morrisons has not regained its mojo after a mediocre first half of the year. "Although management expects negative like-for-like again for the second half (the first was down 0.9%), we were initially more hopeful, but, following the new data, we have now revised down our expectation of second half like for like to -3.0% from 0.0%," the broker revealed.In other broker action, French broker SocGen is sweet on Tate & Lyle, moving to "buy" from "hold". Irish broker Goodbody, meanwhile, has initiated coverage of building-materials company Wolseley with a "buy" recommendation and a share-price target of 3,400 pence. Royal Bank of Scotland (RBS) said it has priced Direct Line at 175p a share, valuing the insurance firm at over £2.6bn. The offer comprises 450m existing shares, representing 30% of the 1.5bn total, raising RBS £787m. The flotation price is in the bottom half of the indicated range of between 160p and 195p a share.Hot on the heels of its failed merger with Airbus owner EADS, defence firm BAE Systems has confirmed that trading since its interim results at the beginning of August has been in line with management expectations. The shares are higher on speculation that following the collapse of the deal with EADS, the firm could be a break-up candidate. Peace could be about to break out at Bumi, the Indonesia-focused mining giant. It has received a proposal from major shareholder, the Bakrie Group, which wants to swap its stake in the group for a stake of equivalent value in Bumi Resources, Bumi's Indonesia-listed affiliate which is under investigation for alleged financial irregularities.The group has been the subject of a board room battle between the influential Bakrie family and blue-blooded London financier Nat Rothschild. The shares shot up on hopes that the complicated cross-holdings situation at the firm would be simplified by the new proposals.Packaging firm DS Smith said its purchase of SCA Packaging was expected to deliver a return on investment above the cost of capital this financial year, together with substantial earnings enhancement.Other marketsThe most actively traded futures contract for Brent crude rose 77 cents to a price of $115.10 a barrel.With investors piling into equities, gilts were neglected. The yield on the 10-year gilt edged up to 1.70% from 1.67% overnight.FTSE 100 - RisersBurberry Group (BRBY) 1,136.00p +13.26%Barclays (BARC) 232.65p +4.80%Croda International (CRDA) 2,322.00p +4.55%Royal Bank of Scotland Group (RBS) 273.80p +4.23%Eurasian Natural Resources Corp. (ENRC) 331.80p +3.43%Vedanta Resources (VED) 1,094.00p +3.21%Kazakhmys (KAZ) 746.00p +3.18%Petrofac Ltd. (PFC) 1,630.00p +2.77%British Land Co (BLND) 524.00p +2.64%BG Group (BG.) 1,333.50p +2.38%FTSE 100 - FallersMorrison (Wm) Supermarkets (MRW) 269.50p -1.64%GlaxoSmithKline (GSK) 1,427.50p -0.59%Smith & Nephew (SN.) 651.50p -0.53%Next (NXT) 3,576.00p -0.47%SABMiller (SAB) 2,660.00p -0.30%United Utilities Group (UU.) 727.00p -0.27%National Grid (NG.) 689.00p -0.22%Severn Trent (SVT) 1,671.00p -0.18%Serco Group (SRP) 583.00p -0.09%Bunzl (BNZL) 1,099.00p -0.09%FTSE 250 - RisersBumi (BUMI) 259.00p +39.47%Home Retail Group (HOME) 105.00p +6.38%Premier Oil (PMO) 374.70p +5.79%Essar Energy (ESSR) 128.40p +5.07%Pace (PIC) 166.80p +4.25%Centamin (DI) (CEY) 100.60p +3.93%Smith (DS) (SMDS) 197.30p +3.84%Ruspetro (RPO) 106.20p +3.81%Informa (INF) 411.80p +3.49%Travis Perkins (TPK) 1,135.00p +3.46%FTSE 250 - FallersKenmare Resources (KMR) 36.51p -5.29%Man Group (EMG) 88.85p -4.87%Greggs (GRG) 495.50p -4.07%Diploma (DPLM) 456.70p -3.87%JD Sports Fashion (JD.) 731.00p -3.69%WH Smith (SMWH) 631.00p -3.22%Fenner (FENR) 370.00p -2.63%Dixons Retail (DXNS) 21.16p -2.44%Savills (SVS) 391.20p -2.25%Talvivaara Mining Company (TALV) 148.00p -2.12%FTSE TechMARK - RisersGresham Computing (GHT) 69.00p +6.98%CML Microsystems (CML) 400.00p +4.99%Sepura (SEPU) 89.25p +3.78%XP Power Ltd. (DI) (XPP) 909.00p +3.77%Wolfson Microelectronics (WLF) 198.00p +2.59%NCC Group (NCC) 975.00p +2.09%Vislink (VLK) 28.75p +1.77%RM (RM.) 84.25p +1.35%Oxford Biomedica (OXB) 2.60p +0.97%Phoenix IT Group (PNX) 157.25p +0.72%FTSE TechMARK - FallersHiwave Technologies (HIW) 1.15p -6.12%Torotrak (TRK) 34.00p -4.23%Optos (OPTS) 196.00p -3.80%E2V Technologies (E2V) 116.00p -3.13%BATM Advanced Communications Ltd. (BVC) 16.50p -2.94%Xaar (XAR) 247.50p -2.56%Kofax (KFX) 292.00p -2.01%Ark Therapeutics Group (AKT) 3.30p -1.49%Antisoma (ASM) 1.68p -1.47%Skyepharma (SKP) 86.88p -1.00%JH