Retail stocks pushed the FTSE 100 Index higher today as takeover speculation surrounded Argos owner Home Retail Group.
Talk of a potential bid by supermarket chain Asda – whose chief executive Andy Bond is moving to a part-time chairman role – saw Home Retail’s shares top the risers board, adding 13.8p to 294.2p or 5%.
The wider Footsie closed 6.7 points higher at 5777.7 after briefly climbing above 5800 on news of a Greek bail-out plan agreed by European finance ministers.
Wall Street’s Dow Jones Industrial Average also took some heart from the news - trading above 11,000 – although markets had already rallied before the weekend on hopes of a rescue.
This helped the euro strengthen against the dollar, although the European single currency largely held firm against the pound, at 1.13 euros. Sterling was up against the dollar at 1.53.
In London retail stocks were in favour, helped by the bid talk over Home Retail Group.
Asda is understood to be eyeing a number of firms both on the high street and in out-of-town shopping parks, including Home Retail and budget clothing chain New Look, although Asda has declined to comment.
Asda owner Wal-Mart – the US supermarket giant – saw shares slip on Wall Street as investors feared an expensive acquisition trail.
Elsewhere in the sector, fellow DIY giant and B&Q parent Kingfisher also received a boost from investor attention, up 2.1p to 232.5p. Fashion chain Next was a solid performer, adding 32p to 2303p to continue its strong recent run.
Sainsbury’s joined them on the risers board as it rallied by 2% or 8.2p to 346.6p. Bank of America Merrill Lynch upgraded the stock to buy and said the retailer was well placed due to its roll-out of non-food and the addition of new space.
Marks & Spencer was another beneficiary of broker comment after Seymour Pierce issued a buy rating in the wake of last week’s fourth quarter trading update, which was better than expected.
It said there was momentum in the business and predicted that new chief executive Marc Bolland will have a positive impact on the food operation, which helped M&S shares rise 5.6p to 375.8p.
Banks were likewise on the front foot, with Barclays up 8.2p at 364.7p – helped by market expectations for storming trading results in the wake of first quarter figures from Swiss banking group UBS.
Royal Bank of Scotland was also making gains, up 0.2p at 44.9p.
In a quiet day for results news, political pollster YouGov fell 6%, or 2.5p to 36.25p after it revealed a 42% plunge in underlying half-year profits.
The four biggest Footsie risers were Home Retail Group up 13.8p to 294.2p, Sage which rose 6.8p to 257p, Sainsbury’s up 8.2p to 346.6p and Barclays up 8.2p to 364.7p.
The four biggest Footsie fallers were British Airways down 5.3p to 242.7p, Intertek off 31p to 1470p, Fresnillo down 17p to 867p and Randgold Resources down 105p to 5355p.