Marks & Spencer and Burberry featured on a shortened fallers board today as the wider London market made decent gains following an encouraging debt auction in beleaguered Spain.
The FTSE 100 Index closed 100.7 points higher at 5766.9 as better-than-expected corporate earnings and strong homebuilding data from the US also lifted sentiment.
Burberry took the top spot on the fallers board despite revealing a surge in revenues, while M&S disappointed investors with an unexpected drop in the first three months of the year.
In the US, Goldman Sachs, Coca-Cola and Johnson & Johnson all reported results above expectations while the Commerce Department provided further cheer as it said builder requests for new project permits hit a three-and-a-half year high in March.
The pound was up against the euro at 1.21 as the single currency continued to be undermined by fears over Spain’s creaking public finances. Sterling was also up against the US dollar at 1.59.
Banks were the beneficiaries of the improved sentiment, after slumping yesterday on fears that Spain’s implied cost of borrowing is creeping higher towards unsustainable levels.
The mood was helped by a decent debt auction in Spain, which saw the yield on the country’s 10-year bonds ease from the 6% mark seen yesterday.
Barclays lifted 9.8p to 220.6p amid hopes that the forthcoming UK banking sector reporting season will not be as bad as some have feared, while Royal Bank of Scotland was 0.9p higher at 25.2p and Lloyds Banking Group added 1.3p to 30.95p.
Insurer Aviva was also doing well, with a gain of 9.3p to 307.6p.
Marks & Spencer shares were in the spotlight after chief executive Marc Bolland reported like-for-like sales fell 0.7% in the 13 weeks to March 31, disappointing the City after growth in the previous quarter.
He blamed supply problems that left it short of popular womenswear lines and despite profit expectations remaining in place the company’s shares were 2% or 9p lower at 358.7p.
There was an even bigger fall for luxury goods firm Burberry, although the decline in the wake of second half sales figures followed a record high for the stock on Monday.
The company said retail revenues were up 23% to £743 million in the six months to March 31 and added that it planned to grow store space by up to 14% in the current financial year. The sales update was broadly in line with forecasts but shares still fell 6% or 94p to 1492p.
Daily Mail & General Trust was the biggest faller in the FTSE 250 Index after it disappointed investors by warning that profits for the first half of its financial year will be lower than in 2011.
Part of the reason for the decline will be lower advertising revenues, higher average newsprint costs and additional digital promotion costs at its Associated national newspapers division.
DMGT said the outlook for the full year remains unchanged but shares still fell 5% or 20.8p to 423.8p.
The biggest Footsie risers were Antofagasta up 56p at 1176p, Barclays ahead 9.8p at 220.6p,
Anglo American up 101p at 2328.5p and Vedanta Resources ahead 52p at 1214p.
The biggest Footsie fallers were Burberry down 94p at 1492p, Marks & Spencer off 9p at 358.7p, Imperial Tobacco down 31p at 2447p and Sage Group off 3.2p at 283.2p.