Market Report: Bargains at M&S shine through all the gloom

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The Independent Online

As global markets suffered yet another dramatic sell-off, there was a glimmer of hope that the doom and gloom could end up helping some of the UK-focused retailers with Marks & Spencer finishing as one of the session's few risers.

Despite the blue-chip index bringing to a close its worst week since 2008, the high-street institution – which has proven relatively resilient over the past few days – managed to tick up 3.3p to 333.8p. It was given a boost by Espirito Santo choosing it as one of its favourite stocks among the retailers, as the broker's analyst Sanjay Vidyarthi suggested the sector may benefit from the recent economic turmoil.

"One consequence of current uncertainties may be a strengthening of sterling against both the euro and the US dollar," said Mr Vidyarthi, who added that not only would it help counter inflation for consumers but also alleviate input cost pressures for the retail companies.

Traders said M&S was also getting support thanks to the recent weakness of cotton, with Next announcing earlier in the week that it expected to keep its prices steady next year. The fashion retailer, which managed tooutperform the index by easing back just 25p to 2,327p, was another of Mr Vidyarthi's picks, as was Halfords.

The mid-tier bicycle retailer jumped up 2.3p to 302.3p as the analyst claimed that, despite its poor update last month, it "remains a fundamentally strong business", going on to say that despite drivers delaying maintenance on their cars, this was "not sustainable longer term".

Although the FTSE 100 managed to move off an early session low of 5,202.62 points, by the bell it was still 146.15 points behind at 5,246.99, meaning over the week it has lost more than 568.2 points. It attempted a rally during trading after the closely-watched US non-farm payroll figures showed more jobs had been added in July that expected, but it was short-lived as traders noted eurozone sovereign debt fears taking precedent.

"This is not fundamentals, this is about sentiment," said one, and investors' confidence was not helped by vague rumours spreading late in the session that Standard & Poor's was about to downgrade the US credit rating, although city voices were sceptical over the mutterings.

The banks' reporting season finished on a down note, with Royal Bank of Scotland revealing it had suffered a second-quarter pretax loss of £678m. The group fell to an early trough of 24p – which would have been its worst share price for over two years – before ending the day 2.1p behind at 28.18p.

The rest of the European sector was also badly hit, including Lloyds Banking Group which declined 2.15p to 32.85p, while Barclays shifted down 10p to 186p.

The commodity stocks were largely suffering as well, with Tullow Oil pegged back 62p to 1,012p while Rio Tinto and Eurasian Natural Resources retreated 174.5p to 3,622p and 30p to 633p respectively. However, Glencore International managed to finish as the blue-chip index's top performer after the commodities trader advanced 17.4p to 408.4p.

Its first rise for nine sessions was prompted by Citigroup reiterating its "buy" rating on the stock, with the broker claiming that, despite the group dropping nearly 23 per cent since floating in May, there was nothing "company specific" to blame for its recent poor performance.

Elsewhere, Inmarsat managed a minor rebound of 8.2p to 402.7p after losing more than 19 per cent on Thursday, when it announced it was no longer expecting growth this year from its maritime operations. Prime Markets' Richard Curr said the move was "way too severe" and predicted its share price would make a full recovery within six weeks.

With any hint of bad news being seized upon, Old Mutual dipped 2.2p to 110.9p despite revealing an adjusted operating profit for the first-half of the year of £845m, well ahead of forecasts, after saying the state of the markets meant it may delay the float of its fund management unit until after 2012.

Also behind was Hunting on the FTSE 250, as the oil services group announced it had agreed a $775m deal to buy the US company Titan, and – with over £85m being raised through a share placing to help pay for the acquisition – it was pushed back 73.5p to 646.5p.

Despite house prices seeing a rise for the third straight month, according to the Halifax, Rightmove was on the slide after JP Morgan Cazenove downgraded its advice to "neutral". The broker said it saw "any additional tailwind from the UK housing market as unlikely in the short term", as the online property website was knocked back 79p to 1,106p.

On the small-cap index, Axis-Shield was lifted 8p to 458p as the diagnostics group criticised the proposed 460p-a-share hostile bid from its US peer Alere, saying it "fundamentally undervalued" the company.

FTSE 100 Risers

BSkyB 671p (up 11.5p, 1.74 per cent)

Broadcaster advances in the wake of Royal Bank of Scotland keeping its "buy" advice.

RSA Insurance 119.4p (up 1.3p, 1.1 per cent)

Sees small bounce after falling on Thursday after the release of its interim results.

Centrica 305p (up 2.1p, 0.69 per cent)

British Gas owner rises as E.ON becomes the latest energy company to increase its prices.

FTSE 100 Fallers

BT 180.3p (down 14p, 7.21 per cent)

Telecoms company's latest fall means it closes at its lowest level since last March.

British Land 529p (down 34p, 6.04 per cent)

Real estate investment trust continues to dip after its first-quarter results on Thursday.

Randgold Resources 5,720p (down 200p, 3.38 per cent)

Precious metals miner hit by Numis cutting its advice to "add" from "buy".

FTSE 250 Risers

Bodycote 323.6p (up 8.2p, 2.6 per cent)

Engineer sees decent bounce after falling over 18 per cent in the past three sessions.

Cobham 177.5p (up 3.3p, 1.89 per cent)

Aerospace electronics company advances as UBS reiterates its "buy" recommendation.

William Hill 221.5p (up 3.5p, 1.61 per cent)

Bookmaker announces a 9 per cent rise in its operating profit for the first half of the year.

FTSE 250 Fallers

Premier Foods 12.96p (down 2.92p, 18.39 per cent)

Owner of Hovis plummets as its first-half profits drop nearly 30 per cent.

Millennium & Copthorne 474.8p (down 25.2p, 5.04 per cent)

Hotels company continues to retreat after Tuesday's second-quarter update.

Misys 280.3p (down 11p, 3.78 per cent)

Software group falls despite JP Morgan Cazenove raising its rating to "overweight" from "neutral".

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