Retail and mining stocks give FTSE minor boost

Strong gains from miners and retailing giant Marks & Spencer helped the London market rebound from a three-day run of losses today.

Marks & Spencer shares powered more than 3% ahead today as investors reacted to bullish trading comments from chief executive Stuart Rose.

The shares surge helped drag the FTSE 100 Index into positive territory, closing up 13.5 points at 6474.9.

M&S delivered better-than-expected half-year profits, while also announcing a £1 billion share buy-back and giving a confident outlook despite current tough trading conditions. The stock rose 21p to 653p.

Meanwhile higher metal prices saw miners also lend much-needed support to the Footsie, which had suffered a near-300 point loss over the previous three trading sessions.

But Bank of England Governor Mervyn King’s comments that the full impact of the subprime mortgage crisis could take “several months” to emerge took the gloss off what was a stronger start for the Footsie, up more than 45 points in the first hour of trading.

Miners helped keep the market out of the red, littering the leaders’ board, with BHP Billiton the top riser up 75p to 1775p, Anglo American cheering 100p to 3152p and Rio Tinto ahead 137p at 4334p.

Exploration and production firm Tullow Oil – linked with possible sector consolidation moves recently – was another top performer with a rise of more than 3% or 20.5p to 668p.

Oil majors BP and Royal Dutch Shell saw muted reactions to news that oil prices hit new intra-day trading highs yet again, touching 97 US dollars a barrel at one stage.

BP rose 1.5p to 633.5p, while Shell lifted 8p to 2009p.

Elsewhere in the retail sector, Sainsbury’s gained 5p to 445p as investors returned to the stock after a 21% slump in the previous session following the failure of 600p a share takeover talks.

But the Bank of England governor’s comments on the lingering impact of the credit crunch put banks on the back foot again.

Northern Rock was off 6.7p at 164.1p, also hit by broker claims that lending levels had fallen by as much as 80%. Halifax Bank of Scotland fell 9.5p to 800.5p and Royal Bank of Scotland dipped 8.5p to 455.75p.

Barclays, however, ended the day with shares up 2.5p at 524p, rising from the three-year lows hit yesterday on credit crunch concerns.

Primark owner Associated British Foods meanwhile was down more than 2% after annual results today. While Primark continued to show strong growth, analysts were concerned about margins pressure and the impact of EU sugar reforms on profits in the current financial year, sending its shares 21.5p off at 890.5p

In the second tier, pubs chain JD Wetherspoon fell 15.5p to 486.5p after it reported a like-for-like sales decline of 1% for the first quarter of its financial year.

SMG shares fell by more than 10% after the Virgin Radio owner said it would carry out a rights issue in order to reduce debt. The stock later recovered to stand 5%, or 1.5p, lower at 30p.

The biggest Footsie risers were BHP Billiton up 75p at 1775p, Marks & Spencer ahead 21p at 653p, Anglo American up 100p at 3152p and Rio Tinto up 137p at 4334p.

The biggest Footsie fallers were British Airways down 16p at 389p, Northern Rock off 6.7p at 164.1p, Intercontinental Hotels down 25p at 1025p and Associated British Foods down 21.5p at 890.5p.