High street optimism prompts FTSE retail surge

Further signs of life from the UK high street helped retail stocks surge up the FTSE 100 Index risers board today.

Marks & Spencer rose 4% and Next added 7% after department store chain Debenhams reported better-than-expected half-year figures and said it had made a strong start to the second half.

The wider London market was steady after a late sell-off on Wall Street left the Dow Jones Industrial Average 1% lower last night. By mid-morning, the Footsie stood 20.8 points higher at 4051.3.

The retail sector’s rally came a day after broker Citigroup reviewed its position in the sector with a series of price upgrades.

With WH Smith also reporting solid half-year results, the signs of a return in consumer confidence meant top-flight fashion retailer Next rose 98p to 1533p and Argos firm Home Retail Group added 11p to 275p. M&S improved 13.5p to 342.75p.

Debenhams set the pace in the FTSE 250 after it announced a 10.7% rise in half-year profits and said current like-for-like sales were up 1.9%. Shares jumped 24% or 15.5p to 79p as analysts suggested that the strong trading figures reduced the need for the company to carry out a rights issue.

WH Smith shares were ahead 0.25p to 410.25p as investors welcomed a 17% rise in the company’s dividend payment, alongside optimistic comments from chief executive Kate Swann.

Back in the top flight, shares in testing and inspection firm Intertek climbed to the top of the risers board amid speculation of possible bid interest. Shares were 12% or 107p higher at 1033p.

However, Mecca firm Rank slid 10% in the second tier, or 7.25p to 66.75p, after it warned on profits last night in the wake of a surprise hike in bingo duty and poker tax in the Budget.