Boots warning doesn't hold FTSE back

The FTSE 100 Index managed to break into positive territory today despite a profits warning from Boots unsettling the retail sector.

The health and beauty chain was the heaviest top-flight faller and dragged down other blue-chip stocks such as Next and Dixons after saying trading since its last update in January had deteriorated further.

But the Footsie shook off the gloom to rise 12.8 points to 4980.8 as news from the likes of Friends Provident and British American Tobacco cheered investors.

Fears over possible rate rises across the Atlantic left the Dow Jones Industrial Average 75 points lower last night, but analysts were expecting the index to open higher today.

In London, Boots lost nearly 5% of its value, down 30p to 633.5p. It now expects annual operating profits for its core Boots the Chemists chain to be in the range of £465m (€676.9m) and £475m (€691.5m), compared with the previous forecast of £490m (€713.3m) and £500m (€727.9m).

Retailers following it into the red included Dixons, which lost more than 1%, off 2.25p to 158.25p, while Next slipped 8p to 1533p and Argos owner GUS weakened 2.5p to 939.5p.

In contrast, British American Tobacco was helping to drive the market forward as it announced a 20% increase in profits and said it was planning “substantial” savings in its supply chain. The stock advanced 22p to 977p.

Friends Provident was the second highest riser, adding 5.25p to 169.5p, after saying its products would be sold through Barclays’ new financial advice service, which is to be launched later this year. Barclays was also 1% higher, up 6p to 571p.

Meanwhile, pubs and hotels group Whitbread lifted 7p to 909.5p after saying its David Lloyd Leisure fitness clubs had continued to deliver “creditable” sales growth despite membership falling.