FTSE ends higher on retail results

The London market was led higher by retailers today after encouraging results from Next and John Lewis provided the sector with some much-needed cheer.

Next was the biggest riser, climbing 6%, as investors applauded an 8.5% increase in half-year pre-tax profits to £228m (€262m).

This provided a lift to the retail sector and helped the FTSE 100 Index rise 1%, or 52.8 points to 5227.

The pound was down at 1.58 against the dollar and at 1.15 against the euro after another rise in unemployment figures.

Retailers have been hammered amid the squeeze in consumer spending in recent months, but employee-owned John Lewis Partnership helped the mood after it said like-for-like sales for the last six weeks were up 1.9% at its department stores and by 3.9% at supermarket chain Waitrose.

Profits were down 18% overall but, like Next, the group said it was making progress in the face of tough conditions.

Next rose 148p to 2483p, while Marks & Spencer added 7.9p to 326.5p and B&Q owner Kingfisher rose 5.7p to 239.6p ahead of results tomorrow. Fashion brand Burberry was up 73p to 1367p.

Banks were also among the risers after credit ratings agency Moody’s said it would not downgrade them imminently as a result of the Independent Commission on Banking’s proposed shake-up of the sector.

Royal Bank of Scotland rose 0.9p to 22.8p, Lloyds increased 1.7p to 33.5p and Barclays was ahead 3.7p at 152p.

The attention of the wider market was focused on the eurozone after Moody’s downgraded the credit ratings of French banks Societe Generale and Credit Agricole as worries grew about their potential exposure to the debts of Greece. But the decision had been widely expected and meant European markets held firm.

Traders were also anticipating that a conference call between French, German and Greek leaders tonight would help to bring an end to fears of a Greek default.

Shares in oil giant BP were also nearly 4% higher, up 13.5p to 395.1p, after a key report into last year’s Gulf of Mexico rig explosion and oil spill appeared to spread some of the blame for the disaster. This could make it less likely that BP will be found grossly negligent, which could leave it facing significantly smaller liabilities.

Outside the top flight, shares in construction firm Galliford Try were ahead 5%, or 21.5p at 426.5p, after it reported stronger than expected profits.

Galliford benefited from a resilient new homes market in the south of England, while more work at the All England Club, where it has recently rebuilt Number 3 court, ensured half-year profits rose 24% to £43.6m.

Meanwhile, housebuilder Barratt Developments posted is first underlying profit for three years, which helped shares rise 0.9p to 77p.

The biggest Footsie risers were Next up 148p at 2483p, Intercontinental Hotels ahead 60.5p at 1047p, Burberry up 73p at 1367p, and Lloyds ahead 1.7p at 33.5p.

The biggest Footsie fallers were Imperial Tobacco down 42p at 2012p, Land Securities off 12p at 658p, Lonmin down 19p at 1161p, and British Land off 7.5p at 494p.