FTSE: Buyers flock to Home Retail Group

HOME Retail Group, owner of the Argos catalogue shopping chain, topped the FTSE 100 risers' board yesterday on takeover speculation.

Dealer talk of a potential bid for the company by supermarket giant Asda saw shares in Home Retail, which also owns DIY business Homebase, jump 5 per cent, or 13.8p, to 294.2p.

It came as the supermarket chain confirmed that its current chief executive Andy Bond will become non-executive chairman later this year after a new chief executive is appointed.

Asda owner Wal-Mart saw shares slip on Wall Street as investors feared it might overpay for HRG. Neither side would comment.

The FTSE 100 index closed 6.67 points higher at 5,777.65 after briefly climbing above 5,800 – a fresh intra-day 21-month high – on news of the 30 billion (26.4bn) Greek bailout plan agreed by European finance ministers.

One trader said: "The uncertainty about Greek debt has been a negative overhang on market sentiment for quite a while now. This bailout by the rest of the eurozone has helped."

Wall Street's Dow Jones Industrial Average also took some heart from the news – trading above 11,000 – although markets had already rallied before the weekend on hopes of a rescue.

This helped the euro strengthen against the dollar, although the European single currency largely held firm against the pound, at 1.13. Sterling traded slightly up against the dollar at $1.53.

Elsewhere in the retail sector, Kingfisher, owner of B&Q, put on 2.1p to 232.5p. Fashion chain Next was a solid performer, rising 32p to 2,303p to continue its strong recent run.

Sainsbury's rallied by 2 per cent, or 8.2p, to 346.6p. Bank of America Merrill Lynch upgraded the stock to "buy" and said the retailer was well placed due to its roll-out of non-food and the addition of new space.

Marks & Spencer was another beneficiary of broker comment after Seymour Pierce issued a "buy" note following last week's upbeat Q4 trading update.

Seymour said M&S now had momentum and predicted that new chief executive Marc Bolland would have a positive impact on the food operation. M&S closed up 5.6p at 375.8p.

Banks made gains. Barclays was up 8.2p at 364.7p – after a storming performance in the first quarter of this year from Swiss banking group UBS.

Royal Bank of Scotland rose 0.2p to 44.9p.

Lloyds Banking Group climbed 0.9 per cent to 64.53p. Lloyds is reported to be holding talks with various stockbroking firms, including Numis Securities, Evolution, and Execution Nobel on setting up a joint venture that would bolster its presence in equity capital markets, although Lloyds has not commented.

In a quiet day for results news, political pollster YouGov fell 6 per cent, or 2.5p, to 36.25p after it revealed a 42 per cent plunge in underlying half-year profits.

Miners waned, clipping some of Friday's gains. Antofagasta was the biggest loser, down 1.6 per cent at 1,045p after Citigroup downgraded its rating to "hold" from a "buy".

Xstrata fell 1.3 per cent, or 17p, to 1,282p, on reports that the miner is mulling a $3.7bn offer for Australia's Macarthur.