Signs of a slowdown in the UK’s dominant services sector may have cast a shadow over the economic outlook, but Marks & Spencer brought some much-needed cheer to the City.
The high street stalwart took the market by surprise with a rise in first-half profits, despite a continued fall in clothing sales, and its shares ended the day up 9.7 per cent, or 39.4p, at 444.1p.
Jasper Lawler, market analyst at CMC Markets UK, said: “Trading was more positive in Europe; after a two-day pullback stocks looked to continue the momentum started by the Bank of Japan at the end of last week as US elections finished without too much fanfare.
“European service sector data painted a well-known picture of weakness in Europe but the surprise came from the UK whose service sector appears headed in the same direction. Nevertheless earnings from Marks & Spencer impressed, aiding the FTSE 100.”
The top-flight index added 85.17 points to finish the trading session at 6,539.14.
With M&S putting in a stellar performance, Associated British Foods – owner of rival Primark – gained 159p, or 5.7 per cent, to close at 2,942p, while supermarkets were also higher.
Tesco lifted 3.9p to 175.75p, while Sainsbury’s gained 5.5p to 247.3p and Morrisons surged 9.1p, or almost 6 per cent, to 162.4p ahead of a trading update expected tomorrow.
Ocado was the biggest riser in the FTSE 250 as the figures from M&S showed that those trading at the upper end of market have been less affected by the ongoing supermarket price war. Shares in the online grocer soared 12.8 per cent, or 33.5p, to end the day at 296p.
Elsewhere, insurer Esure reversed 17.5p, or 7.3 per cent, to 222p after it reported a 7.4 per cent fall in gross written premiums to £149.6 million for the three months to 30 September, driven by an 8.8 per cent drop in the motor sector.