Retail sales boost Footsie

Retailers kept the FTSE 100 Index in forward gear today after a surprise rise in high street sales last month and upbeat results from B&Q owner Kingfisher.

The Footsie stood 3.3 points higher at 4551.7 by mid-morning as investors asked whether talk of a slowdown in consumer spending had been premature.

It followed the Office for National Statistics announcement that higher demand for clothing and food had led sales to rise by 0.6% in August against expectations of a 0.3% fall.

Investors were able to shake off a 1% drop on the Dow Jones Industrial Average overnight, which followed a profits warning from Coca-Cola, resurgent oil prices and a potential large-scale disaster due to Hurricane Ivan.

Shares in Kingfisher lifted 4.5p to 294.5p after it announced a 6% hike in sales at B&Q and said half-year profits had risen 18.4% to £345.9 million.

Other retailers to benefit from the positive news flow in the sector were Tesco, up 2p at 272.5p, Marks & Spencer ahead 0.25p at 350.25p and Dixons a penny stronger at 164p.

However, Cadbury Schweppes suffered in the wake of the profits warning from Coca-Cola, off 4p at 437p. Around 25% of its turnover is generated by drinks sales in the United States.

FTSE 250 Index steelmaker Corus displayed its credentials for a place in the top flight by unveiling its first profits since its creation five years ago.

The group’s first half performance was well ahead of market expectations, although shares were unchanged at 49.5p as it warned that the sale of a aluminium business may be delayed until the new financial year.

And investors in Eldridge Pope had something to cheer after the troubled pubs operator backed a £42.3 million takeover by entrepreneur Michael Cannon.

Shares rose 5% or 7.5p to 170p – just below the offer price from Mr Cannon, which was made through his EP Investments bid vehicle.