FTSE close: SABMiller, BA up; Intertek down

 

17.00 (close)

Financial Trading board

London's FTSE 100 Index staged a bounce back today amid growing confidence that Ireland will resolve its debt crisis.

The arrival in Dublin of a rescue team from the IMF fuelled speculation that the country will soon receive tens of billions of euros in loans in an effort to provide much-needed stability to the European financial system.

The FTSE 100 Index reclaimed some of the hefty losses seen in recent sessions, closing 76.2 points higher at 5768.7.

Stocks also bounded ahead on Wall Street, with the Dow Jones Industrial Average up 1.6%, while indices across Europe were likewise higher on investor cheer.

A fall in the value of the US dollar made commodity stocks more attractive to investors and the greenback's weakness helped the pound strengthen, to 1.60 dollars.

There was further encouragement from the OECD after it said that economic growth in the world's most developed economies will gradually pick up pace over the coming two years although the recovery will be uneven.

The developments in the Irish debt crisis eased pressure on UK banks as Lloyds Banking Group lifted 1.4p to 67.8p and Royal Bank of Scotland cheered 0.3p to 42p.

The mining sector also benefited from hopes that China will not use higher interest rates as a way of slowing inflation, helping lift Rio Tinto by 134p to 4281.5p and Kazakhmys by 44p to 1470p.

They were joined on the way up by British Airways, which climbed 11.5p to 272.9p after Air France-KLM raised its full-year earnings target.

The biggest rise of the session came from SABMiller, which added 105p to 2157p after the maker of beers including Grolsch and Peroni Nastro Azzurro posted better-than-expected profits for the first half of the year.

There was a similar shares boost for defence technology firm Qinetiq in the FTSE 250 Index after it reassured investors with a rise in half-year profits and as it said it remained on track to meet full-year guidance.

Shares jumped 14% or 13.5p to 112.5p after Qinetiq also announced a major fall in its debt pile following ongoing restructuring measures.

The defence firm was joined on the risers board by Halfords after shares in the car accessories firm recovered from a weak start seen in the wake of its half-year results.

It reported a 5% drop in like-for-like sales in its UK retail division over the past six weeks, offsetting a rise in half-year profits.

Shares were initially 2% lower but recovered to stand 15.1p higher at 426.6p, a rise of 4% on the start of trading.

Other FTSE 250 retailers on the front foot included Debenhams, which climbed 2p to 71.4p after official figures showed a 0.5% month-on-month rise in sales volumes for October.

The biggest Footsie risers were SABMiller up 105p to 2157p, Fresnillo ahead 68p to 1414p, British Airways up 11.5p to 272.9p and InterContinental Hotels up 37p to 1139p.

The biggest Footsie fallers were Intertek Group down 122p to 1828p, Capita off 32p to 690p, Capital Shopping Centres down 5.7p to 372p and Reed Elsevier down 7p to 529p.

15.20: On Wall Street, the Dow Jones has opened slightly higher and in early trading is up 165.67 points at 11,173.55.

That has bolstered London shares and The FTSE 100 is 76.95 points higher at 5769.51.

14.00:

Shares are being helped by speculation that China will move to control food price inflation with price controls rather than raising rates.

That has helped the miners with Rio Tinto up 113.5p at 4261p and Kazakhmys ahead 38p to 1464p.

UK banks have been lifted by the expectation that Ireland will be forced to accept an EU bailout. Lloyds Banking Group lifted 1.65p to 88p and Royal Bank of Scotland cheered 0.8p to 42.5p.

The Footsie is 79.18 points higher at 5771.17.

13.50

Economic news today included the latest borrowing figures, which showed the UK fell a further £10.3bn into the red in October.

The figure issued by the Office for National Statistics (ONS) grew ahead of expectations despite a bumper in-take of corporation tax.

New mortgage data showed lending stalled in October. A total of £12.4bn was lent during the month, unchanged from September but 9% lower than in October 2009, according to the Council of Mortgage Lenders.

High Street sales rose 0.5% in October as canny shoppers decided to beat the VAT hike in January, according to the latest retail sales figures from the ONS.

The rise followed two months of declines, although shopping is still down 0.1% compared with the same month last year.

Meanwhile, car production grew in October with 112,798 vehicles rolling off UK production lines and commercial vehicle production enjoying a sharp increase as the economy recovers.

There was a 6% increase in overall production compared to October 2009 figure, the Society of Motor Manufacturers and Traders (SMMT) said.

The FTSE 100 is now 78.34 points higher at 5,770.90.

13.20:

The corporate diary for today included results from defence technology firm QinetiQ.

QinetiQ posted underlying pre-tax profits of £51.6m in the six months to September 3, up from £45.1m a year earlier. Revenue was up 7% at £865m.

The maker of bomb disposal robots and sniper detectors is planning to revamp the business and reduce debt in the face of cutbacks by its UK and US government clients.

QinetiQ shares are up today - gaining 11.9p to 110.9p. Read more.

Overall, the FTSE 100 is holding onto gains - it sits 77.91 points up at 5770.47.

12.00:

We've got more on Halfords, which today reported higher profits despite a fall in sales.

A rise in profits to £68.7m in the six months to 1 October was helped by cost cutting measures, its growing business helping consumers to fit car parts and increased website sales.

Shares fell early today but have recovered well. They sit 18p - or 4.37% - up at 429.50p. Read more.

Overall, the FTSE 100 is 82.31 points better off at 5774.87.

10.45 - Small caps update:

Headlam Group has fallen 13.25p to 307.75p after Altium Securities downgraded its rating to 'hold' from 'buy'.

Shares in Brammer have touched a three-year high, with a rise of 9.25p to 219.25, after the British supplier of ball bearings, gearboxes and other industrial products forecast full-year profit at the top end of expectations.

'We remain confident over the future for Brammer as not only do the new key account gains benefit the results short term, they provide a good ongoing level of growth as Brammer rolls out across the customer's operations,' analyst Wayne Gerry of Investec Securities said in a note to clients.

Shares in FTSE 250 engineer Keller fell 45p to 550p 547.5 pence, after it said it expects full-year results to come in at the lower end of expectations.

10.00

London shares have rebounded as it looks increasingly likely crisis-hit Ireland will be forced to accept an EU aid package.

The FTSE 100 jumped 67.33 points to 5,759.89 as Ireland agreed to host talks with EU and IMF finance experts about its troubled banks - although Irish politicians are still reluctant to accept a state bailout.

Concerns about Chinese growth prospects also eased after reports it is not about to hike interest rates after all, and instead plans to fight food inflation with price controls.

Brewing giant SABMiller's shares rose 100.5p to 2152.5p following better than expected first-half profits.

But outsourcing group Capita was a faller after its trading update, which warned about the impact of government spending cuts. Its stock fell 37p to 685p.

British Airways got a boost from Air France-KLM results, rising 7.4p to 268.8p.

Shares in defence firm Qinetiq benefited from a rise in half-year profits and an upbeat forecast for the rest of the year. Its stock was up 14%, or 13.9p to 112.9p.

Electricity and gas supplier National Grid shed 7.5p to 577p despite a 45% leap in first-half earnings.

But a 5% drop in first-half sales hit retailer Halfords, which saw its shares slide 11.8p to 399.7p.

Andrew Bell of Witan Investment Trust said of the Irish crisis: 'There is confidence that the right mechanisms are in place.

'There isn't the same fear that there was in May and June that Europe might collapse in a heap because of debt problems at the same time that the world economy slips into a double-dip recession.'

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