The London market soared more than 4% today as better than expected sales figures from retail giant Marks & Spencer helped lift spirits.
Bargain hunters were also tempted into the fray after Monday’s heavy selling, helping all but a handful of blue-chip stocks make progress.
The FTSE 100 Index finished the session 163.2 points higher at 3926.1 – or 4.3% - with a gloomy assessment of global prospects from the Organisation for Economic Co-operation and Development failing to dampen spirits.
M&S roared 12% higher after its 4.2% drop in like-for-like sales in the final quarter of the company’s financial year was much stronger than City forecasts of a 7% decline.
The firm climbed 31.5p to 296p – its highest close since last August, while other retail players were encouraged by comments from chief executive Stuart Rose that suggested trading conditions had not got any worse in recent weeks.
Next was up 69p at 1324p, while Argos and Homebase owner Home Retail Group cheered 11.25p to 224.75p, or 5%. B&Q owner Kingfisher was 8.9p better at 149.7p.
However, Debenhams slid 11% or 6p to 48p after traders said HSBC had placed Baugur’s 13% stake on the market at a price of between 40p and 45p.
Investors feared the move could make it easier for Debenhams to carry out a cash call in order to drive down debt, which currently stands at around £900m (€972m).
Back in the top flight, traders said yesterday’s banking-driven slump looked to be overdone, causing shares in the likes of Lloyds Banking Group to rally 5.9p to 70.7p.
Royal Bank of Scotland was up 1.2p at 24.5p, while HSBC added 24.5p to 395p.
But Barclays slid 1.1p to 148p despite revealing last night that it would shun the Government’s taxpayer-backed insurance scheme for “toxic” assets, and confirming it had settled on a preferred bidder for its iShares business.
Elsewhere in the top flight, shares in catering group Compass rallied almost 8% or 23.5p to 319p after it said profitability was well ahead of expectations following a positive first half of its financial year.
In the FTSE 250 Index, Enterprise Inns also improved – up 20% or 11.25p to 67.75p – after it said the majority of its pubs were continuing to trade well.
It was followed on the risers board by Currys owner DSG International, which rose 2p to 20.75p amid the improved retail sentiment.
This was echoed by Clinton Cards which jumped 20%, or 2.35p to 12p as it reported flat like-for-like sales in recent weeks, much better than the 5.2% fall recorded for the previous three months. It also said it had extended its bank facilities through to 2012.
The biggest Footsie risers were Old Mutual ahead 6.1p at 51.9p, Mark & Spencer up 31.5p at 296p, Kazakhmys up 38.5p at 371p and Icap up 31.25p at 304.25p.
The three Footsie fallers were Barclays down 1.1p at 148p, Intertek off 6p at 885.5p, and Randgold Resources, which shed 14p to 3685p.