FTSE boosted by M&S success

Marks & Spencer led the FTSE 100 Index forward today with a stellar performance as strong half-year figures from the resurgent retailer sent its shares to a record high.

Shares topped £7 for a spell before dropping back to close at 698p – a gain of 6% or 41.5p – as the City welcomed a 32% rise in first half profits to £405.1 million.

M&S offset disappointment in figures from Associated British Foods, Scottish & Newcastle and Yell as the Footsie closed 19.5 points higher to 6244.

The gain for M&S came as investors dared to believe full-year profits could top £1 billion amid a raft of upgrades by brokers. Shareholders were also buoyed by a 31% rise in the interim dividend.

Oil firms were also lending upside as the price of crude held steady at around 60 US dollars a barrel in New York. BP shares lifted 1.5p to 598.5p while Royal Dutch Shell gained 14p to 1898p.

Miners also got a lift from record zinc prices and strong copper and oil prices. Kazakhmys added 18p to 1253p while Rio Tinto lifted 30p to 3015p and Xstrata gained 31p to 2420p.

But AB Foods fared less well with a fall of 1% or 7p to 844p after it posted declining profits amid difficult trading conditions at British Sugar and Kingsmill.

And shares in Yellow Pages owner Yell Group fell 7% – down 42p to 583p – after its profits for the first half of the year came in below expectations.

Yell said underlying earnings rose 15.6% to £269.2 million in the six months to September 30 – short of the £300 million forecast in the City.

The company blamed seasonal issues relating to the recent acquisition of Spain’s TPI and added it remained on track to meet full-year targets.

Scottish & Newcastle was also on the slide – off 3%, despite seeing leading brands such as Strongbow outperform the rest of the UK market in the third quarter.

Shares were hit – down 16.5p at 552p – as the company warned that 2007 would continue to be tough for the industry.

Barclays added 11p to 716.5p as analysts welcomed its purchase of German exchange-traded funds provider Indexchange Investment and said it fitted well with its global strategy to grow its US presence in mutual fund products. Royal Bank of Scotland was also ahead – 9p to1893p although most other banks were in retreat.

In the second flight, industrial materials firm Cookson took the lead with a gain of 32p to 630p after it released a positive third quarter update and said it now expects its full-year performance to be ahead of expectations.

The day’s biggest blue-chip risers were M&S up 41.5p to 698p, Capita up 20p to 547.5p, ICAP up 15.25p to 528p and Sage up 6.25p to 243p.

The day’s biggest blue-chip fallers were Yell down 42p to 583p, Scottish & Newcastle down 16.5p to 552p, British Energy down 11.5p to 449p and British American Tobacco down 18p to 1433p.