Blue-chips boost FTSE

A late surge by blue-chip shares helped the FTSE 100 Index close the session in positive territory today.

Equities on both sides of the Atlantic were boosted by a larger-than-expected fall in US retail sales, which analysts said increased the chances of the Federal Reserve keeping interest rates on hold.

This lifted the Footsie in the final hour of trading, leaving it 14.9 points higher at 4372.6.

Earlier in the day the mood had been more sombre as revised margin guidance from chip giant Intel weighed on investors.

The pattern was mirrored in New York, with the Dow Jones Industrial Average around 30 points higher after closing time in London.

In London, telecoms giant Vodafone was the highest climber as it arrested its recent slide to stand 2% higher – up 2.5p (3.7c) at 120p (€1.80). An analyst at Dresdner Kleinwort Wasserstein said the stock was benefiting from expectations of good first quarter results.

Embattled retailer Marks & Spencer continued to trade at a substantial bid premium, with shares firming 4.5p (6.7c) to 364p (€5.50).

Analysts believe today’s annual general meeting of the company could decide the outcome of the proposed £9.1bn (€13.6bn) takeover of the chain by tycoon Philip Green, with a number of investors still unsure of which camp to back.

Other retailers holding on to positive territory included Next, which rose 17p (25.5c) to 1470p (€22) after broker UBS raised its target price for shares. Dixons also advanced 2p (3c) to 160p (€2.40).

Supermarket group Morrisons led the Footsie fallers board – down 10.25p (15.4c) to 182.75p (€2.70) – in contrast with rival Tesco, which improved 1.25p (1.9c) to 259p (€3.90) following its latest expansion drive – this time into China.

Among other fallers, a clutch of banking groups were under pressure in the lacklustre market.

Lloyds TSB slipped 2.5p (3.7c) to 401.75p (€6), Northern Rock 5.5p (8.2c) lower at 693.5p (€10.40) and Alliance & Leicester eased a penny to 811.5p (€12.20).

A host of technology stocks were in negative territory with IT hardware specialist Spirent almost 3% lower, down 1.75p (2.6c) at 59p (88.4c). Chip designer ARM Holdings recovered from a decline early in the session to close 0.75p (1.1c) higher at 110.25p (€1.70).

Corporate results were thin on the ground, while those companies that did update the market failed to gain much of a response.

They included discount fashion retailer Peacock Group, which was down half a penny at 243.5p (€3.70) after a 13.6% rise in total sales in the 13 weeks to July 3 against the same period in 2003.

And Center Parcs weakened a penny to 88.5p (€1.30) after reporting annual profits in line with expectations and adding that good progress had been made towards opening a fifth holiday village.

The highest climbers in the Footsie today were Vodafone up 2.5p (3.7c) to 120p (€1.80), Yell ahead 7p (10.5c) to 351p (€5.30), William Hill up 10.5p (15.7c) to 538p (€8) and SABmiller ahead 11.5p (17.2c) to 703.5p (€10.50).

The heaviest fallers were Morrisons down 10.25p (15.4c) to 182.75p (€2.70), Sage off 3.5p (5.2c) to 169p (€2.50), ICI down 4p (6c) to 211.5p (€3.20) and Amvescap off 6p (9c) to 328p (€4.90).