FTSE up as retail sector performs well

Brighter retail stocks and a strong gain by mobile phone group Vodafone encouraged the FTSE 100 Index to post healthy gains today.

The Footsie put back all of the losses seen in its previous session to stand 27.4 points higher at 6094.2 by mid-morning.

B&Q owner Kingfisher lifted 2% or 4p to 240p after broker UBS decided that its shares were now a buy and the British Retail Consortium (BRC) reported increased demand for items such as power tools, garden equipment and lawnmowers in April.

Other retailers benefited from the BRC survey, with Dixons and Currys owner DSG International also on the risers board – up 4.5p at 193p – as investors welcomed its findings that high street sales rose 6.8% on a like-for-like basis last month.

Clothing retailers were also higher after warmer weather drove sales in April. Next was the cheerleader in the sector rising 11p to 1717p, while Marks & Spencer was ahead by 6p to 626p and Argos owner GUS rose 13p to 1052p.

The gains in the retail sector included the supermarket giants, even though the Office of Fair Trading confirmed plans to refer the sector to the Competition Commission for an investigation into allegations of anti-competitive practices.

Tesco, which is likely to be most affected by the distraction of a lengthy inquiry, saw its shares rise 1% or 3.5p to 319.75p with Sainsbury’s ahead 2.25p at 347.75p and Morrisons 0.75p stronger at 190.25p.

Among other contributors to the session, Vodafone shares rallied with a gain of 4.25p to 130.25p.

In the second tier, home shopping retailer N Brown rose 3.75p to 231.25p after posting pre-tax profits of £51.8m (€75.8m) and maintaining strong sales growth into the current financial year.

Music and books retailer HMV was up half a penny at 173.25p, even though it revealed that trading since Christmas had remained poor.