Market Report: Marks & Spencer on Citi's shopping list

We are richer, there are more jobs and we are saving less, so we must be shopping more. Analysts at Citi think "material upgrades to the UK economic growth" will benefit retailers. This coupled with "management initiatives" make high street stalwart Marks & Spencer a more attractive company than before.

Citi's Richard Edwards and his team say investment by the chief executive Marc Bolland in IT, logistics and the supply chain over the past three years has now paid off. They predict M&S's general merchandise will begin to see revenue growth and the amount of clothing sold at a discount will also reduce, so margins will start to improve.

Mr Edwards predicts that the retailer will now meet the double-digit growth forecasts that have been set, and he upgraded the group to buy. He raised its target price to 535p from 470p, and the shares were 7.5p better at 479.1p.

Next also benefited from Citi's viewpoint on retailers, adding 74p to 4,990p.

In contrast, the FTSE 100 index lost 51.13 points to 6,440.97 as fears of a US-led military response to the tensions in Syria grew. Weak US durable goods data on Monday also worried traders.

Michael Hewson, an analyst at CMC Markets UK, said: "It's been a rough day for European markets as investors decide to sit on the sidelines despite a positive German business survey showing that optimism was at its best levels for 16 months."

British Airways' owner IAG was 15.3p lighter at 300.5p following a downgrade to hold from analysts at Investec.

As traders' screens were awash with red, one of the few FTSE 100 risers gushed more than 8.5 per cent, with investors relieved that Petrofac's results were not any worse. The oil services group topped the benchmark index after saying it was positive over the second half of the year.

The group, which supplies infrastructure to oil and gas explorers, has had a tricky year so far, with investors ditching the stock amid concerns about the offshore energy market after profit warnings from rivals such as Italy's Saipem.

Petrofac is still down more than 20 per cent since the start of the year but news that first-half earnings had fallen no more than expected attracted investors.

Punters who had shorted the stock rushed to buy up shares to cover their positions. Data from the research group Markit found the number of shares out on loan was at a 2013 high ahead of yesterday's results, with about 5.5 per cent borrowed. Petrofac flared 108p higher to 1,373p.

The mid-table was having a worse time of it than the blue chips, and the FTSE 250 index was down 185.11 points, or 1.24 per cent, at 14,767.99.

The second-worst performer on the mid-cap index was gold miner Polymetal International, down 68.5p to 741p. The Russian precious metal digger was downgraded to neutral by analysts at HSBC because the shares have risen around 80 per cent in the past two months, although they think the second half of the year will be better.

The publisher and events business UBM rose 10p to 711.5p after a boost from UBS. Analysts at the Swiss bank upgraded it to buy and said its "portfolio clean-up" and the outlook for growth in the events business make it more attractive. They added UBM to their most preferred list and raised their price target to 830p from 740p.

The small-cap aircraft leasing company Avation soared 10p to 76p as it reported annual results and increased its dividend by 10 per cent. The group, whose customers include the tour operator Thomas Cook, Virgin Australia and Fiji Airways, said it has grown its fleet size to 23 aircraft.

British Polythene Industries reported a 17 per cent jump in pre-tax profits for the first half and improved 19.5p to 580p.

The technology group Globo has agreed a deal with IBM to use its platform. The Aim-listed mobile phone software specialist dialled up 3.5p rise to 58.875p.

Pittards, the leather goods business that supplies the likes of Marks & Spencer and Nike, reported a better half-year result. The AIM-listed group said it produced a profit of £1.1m against £100,000 in 2012, and the shares were 0.575p stronger at 2.62p.

peopleStella McCartney apologises over controversial Instagram picture
Arts and Entertainment
Hayley Williams performs with Paramore in New York
musicParamore singer says 'Steal Your Girl' is itself stolen from a New Found Glory hit
Ronaldinho signs the t-shirt of a pitch invader
footballProof they are getting bolder
William Hague
people... when he called Hague the county's greatest
indybestKeep extra warm this year with our 10 best bedspreads
ebooksAn unforgettable anthology of contemporary reportage
More than 90 years of car history are coming to an end with the abolition of the paper car-tax disc
newsThis and other facts you never knew about the paper circle - completely obsolete today
voicesBy the man who has
Arts and Entertainment
Ed Sheeran performs at his Amazon Front Row event on Tuesday 30 September
musicHe spotted PM at private gig
Arsene Wenger tried to sign Eden Hazard
footballAfter 18 years with Arsenal, here are 18 things he has still never done as the Gunners' manager
people'I’d rather have Fred and Rose West quote my characters on childcare'
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Trust Accountant - Kent

NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...

Graduate Recruitment Consultant - 2013/14 Grads - No Exp Needed

£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...

Law Costs

Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...

Day In a Page

Ebola outbreak: The children orphaned by the virus – then rejected by surviving relatives over fear of infection

The children orphaned by Ebola...

... then rejected by surviving relatives over fear of infection
Pride: Are censors pandering to homophobia?

Are censors pandering to homophobia?

US film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence
The magic of roundabouts

Lords of the rings

Just who are the Roundabout Appreciation Society?
Why do we like making lists?

Notes to self: Why do we like making lists?

Well it was good enough for Ancient Egyptians and Picasso...
Hong Kong protests: A good time to open a new restaurant?

A good time to open a new restaurant in Hong Kong?

As pro-democracy demonstrators hold firm, chef Rowley Leigh, who's in the city to open a new restaurant, says you couldn't hope to meet a nicer bunch
Paris Fashion Week: Karl Lagerfeld leads a feminist riot on 'Boulevard Chanel'

Paris Fashion Week

Lagerfeld leads a feminist riot on 'Boulevard Chanel'
Bruce Chatwin's Wales: One of the finest one-day walks in Britain

Simon Calder discovers Bruce Chatwin's Wales

One of the finest one-day walks you could hope for - in Britain
10 best children's nightwear

10 best children's nightwear

Make sure the kids stay cosy on cooler autumn nights in this selection of pjs, onesies and nighties
Manchester City vs Roma: Five things we learnt from City’s draw at the Etihad

Manchester City vs Roma

Five things we learnt from City’s Champions League draw at the Etihad
Martin Hardy: Mike Ashley must act now and end the Alan Pardew reign

Trouble on the Tyne

Ashley must act now and end Pardew's reign at Newcastle, says Martin Hardy
Isis is an hour from Baghdad, the Iraq army has little chance against it, and air strikes won't help

Isis an hour away from Baghdad -

and with no sign of Iraq army being able to make a successful counter-attack
Turner Prize 2014 is frustratingly timid

Turner Prize 2014 is frustratingly timid

The exhibition nods to rich and potentially brilliant ideas, but steps back
Last chance to see: Half the world’s animals have disappeared over the last 40 years

Last chance to see...

The Earth’s animal wildlife population has halved in 40 years
So here's why teenagers are always grumpy - and it's not what you think

Truth behind teens' grumpiness

Early school hours mess with their biological clocks
Why can no one stop hackers putting celebrities' private photos online?

Hacked photos: the third wave

Why can no one stop hackers putting celebrities' private photos online?