Property, retail boost FTSE

Property and retail shares rallied today as investors clung to much-needed positive news from both sectors.

Hopes for a forecast-busting sales rise from Debenhams caused its shares to rally 11%, while Hammerson was 6% higher – up 56p to 989.5p – after it said Marks & Spencer had agreed to anchor its proposed Eastgate scheme in Leeds.

The wider market benefited from the news, while hopes of a recovery for shares in New York enabled the FTSE 100 Index to climb 14.7 points to 6216.7 by mid-morning. The Dow Jones Industrial Average dived 2% on Friday, but some of the decline may be reversed after reports of more financial support for US banks.

The biggest gain in the retail sector came from Debenhams – a FTSE 250 Index stock – after investors took a punt on a newspaper report suggesting like-for-like sales tomorrow will be positive territory, helped by a last-minute trading rally. Shares in Debenhams, which have been rocked by a series of profit warnings, recovered some recent losses to lift 7.75p to 75.5p.

One of the biggest moves in the top flight came from Home Retail Group after shares rose 4% – 11.75p to 284.75p – on hopes for a decent trading update from the Argos and Homebase owner.

Small-cap stock Ted Baker added to the positive mood after it said sales rose 12.5% on a year earlier during the two months to December 24. Shares gained 5%, or 25p to 504p.

The news from the retail sector was not all positive after furniture chain ScS warned it would not pay a dividend this year because of a sharp fall in like-for-like sales in the current financial year. Shares dived 10% or 4.5p to 43p.

Elsewhere, Forth Ports benefited from takeover speculation after it emerged funds controlled by Australian firm Babcock & Brown had built a 20% stake in the ports operator. Shares were 8% higher, or 148p to 2086p.