Retail boost does not bolster FTSE
Investors were drawn back to the retail sector today after a week dominated by concerns over the impact of rising interest rates.
The improved mood benefited the likes of Tesco and Kingfisher, but the overall market was lower as the FTSE 100 Index remained on course to post its fifth consecutive daily decline. By mid-morning, the Footsie stood 26.3 points lower at 6569.7.
Financial stocks dragged the market lower after worries over defaults on sub-prime mortgages in the United States spread to London.
Barclays admitted its investment banking arm had lent money to US hedge funds that are now facing collapse after investing in the non-standard and higher risk home loan market and could face losses.
Barclays said the impact was not material, but shares still fell 8p to 720.5p. Royal Bank of Scotland, which said today it would table its offer for ABN Amro next month, was 8p lower at 633p while HSBC slipped 3p to 926.5p.
In retail, Morrisons neared the top of the risers board with an improvement of 5.75p to 292.75p while Tesco rose 11p to 433p and B&Q owner Kingfisher added 1.75p to 231.25p.
Claire Collingwood, a trader at CMC Markets, said: “The sector as a whole is buoyant, recovering from some heavy losses yesterday after interest rate woes hit retailers worried about consumer spending.”
Financial Times owner Pearson was another riser, up 21.5p to 846p, as investors welcomed its decision not to make a joint bid for Dow Jones.
A surprise move by the Office of Fair Trading to investigate the housebuilding industry failed to rattle firms in the sector.
The consumer affairs watchdog will scrutinise the competition and consumer issues in the industry to ensure both the supply and standard of new homes are giving buyers a fair deal.
In the top flight, Barratt Developments was 1p lower at 1004p, while Persimmon slipped 9p to 1198p, a drop of less than 1%.
Stagecoach made gains in the FTSE 250 Index after it won the competition to run the newly-created East Midlands franchise. Shares were up 3p at 169p, an improvement of almost 2%.
