Modest recovery for FTSE

Marks & Spencer was the FTSE 100 Index’s top faller today despite posting a 13% rise in annual profits as analysts fretted that its results could be “as good as it gets” for the retailer.

The retail bellwether, which has enjoyed a strong run in recent weeks, fell 11.4p to 385.6p, or nearly 3%, as investors looked beyond the rise in full-year profits to £714.3m (€820m) and noted the company’s cautious comments on trading this year.

Despite a share slide at M&S, the FTSE 100 Index staged a modest recovery following Monday’s major sell-off and rose 22.5 points to 5858.4.

The pound was down against the euro at 1.15 after the single currency benefited from stronger economic data from Germany, but was up against the dollar at 1.62.

Miners were among the biggest risers after benefiting from today’s improved sentiment and rising oil and metal prices. This helped offset some of the heavy losses seen yesterday in the London blue chip index following fears over the eurozone debt crisis and faltering Chinese growth.

Cairn Energy was among the top risers, up 16.6p to 435.8p, or 4%, after saying it plans to spend around $600m drilling near Greenland this summer.

However, London’s progress was stunted by a difficult session for UK banks after Moody’s said 14 of the 18 banks and building societies it covers were in danger of ratings downgrades due to the withdrawal of emergency support for the industry.

Such a move would mean higher funding costs for the banks and meant Lloyds Banking Group fell 1.1p to 49.7p and Royal Bank of Scotland dropped 0.4p to 40.4p.

Barclays and HSBC were down 2.7p to 265.6p and 3.2p to 623.5p, even though they were excluded from the Moody’s list.

The update from M&S did little to ease nerves in the retail sector, with chief executive Marc Bolland warning there was major uncertainty over the outlook.

The mood was shared by broker ING, which said that while profits were better than expected the performance could be as good as it gets given the tough UK retail climate.

Other retailers on the back foot included Primark owner Associated British Foods, which fell 11p to 1067p, while supermarket group Tesco dropped 1.6p to 413.3p.

The session was also notable for the full market debut of commodities trader Glencore, which will tonight become the first company in 25 years to be fast-tracked into London’s FTSE 100 Index.

Glencore shares are still lower than their starting price of 530p after dropping to a low of 506p during conditional trading last week before recovering to around 525p today.

Its place in the top flight is at the expense of engineering firm Invensys, which will be demoted to the FTSE 250 Index. It fell 2.1p to 293.1p.

The biggest Footsie risers were Fresnillo up 54p at 1356p, Cairn Energy ahead 16.6p at 435.8p, Aggreko up 57p at 1769p, and Antofagasta ahead 36p at 1196p.

The biggest Footsie fallers were Marks & Spencer down 11.4p at 385.6p, Lloyds Banking Group off 1.1p at 49.7p, International Consolidated Airlines Group down 4.2p at 230.8p, and ITV off 0.9p at 68.1p.