Retail stocks lead rally to end week stronger

RETAIL stocks grabbed the headlines again yesterday as the FTSE 100 Index managed to end a week-long losing streak.

The Footsie closed 9.2 points stronger at 3934 after enjoying a late rally on the back of a stronger-than-expected start to trading on Wall Street.

But most interest was focused on the retail sector and the surprise decision by supermarket group Morrison’s to buy Safeway in a €4.5bn deal.

Safeway shares soared 20%, up 43p to 256p, on the news, but offsetting that were falls by other supermarkets on fears of tougher competition. Overall, the market spent much of the session on the back foot after Wall Street closed the previous session lower after disappointing profits outlooks from firms including computer group Gateway.

But fears in London of another uncertain session in the US evaporated when the Dow Jones Industrial Average pushed 150 points ahead in early trading and gave the FTSE 100 Index a much-needed shot in the arm.

The retail sector’s biggest jump came from jeweller Signet after it said like-for-like sales had risen 4.2% in the two months to Christmas Eve. The biggest Footsie risers were Safeway up 43p at 256p, Reuters ahead 11.25p at 198.75p, Marks & Spencer up 14p at 324.5p, Friends Provident ahead 4p at 110.25p.

The biggest fallers were Morrison’s down 30.25p at 180p and Shire Pharmaceuticals off 47.5p at 355.5p.