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Kingsfisher's dive fails to stop top 100 rally

SHARP falls for B&Q owner Kingfisher and low-cost airline easyJet did not bar another positive session for the London market yesterday.

The FTSE 100 Index recovered from a weak start to stand 23.3 points higher at 6821.5, with banking stocks and housebuilders among those doing well.

The pound lost ground to the dollar, at 1.70, and to the euro, at 1.26, as traders continued to react to yesterday's minutes from the Bank of England which showed that low wage growth prevented members from considering a first rates hike in five years.

Kingfisher was the biggest faller, off 8 per cent or 27.5p to 308.5p, after it revealed like-for-like sales were 1.8 per cent lower in the 10 weeks to July 12.

It blamed weaker than expected trading in France and Poland, while B&Q sales were 3.2 per cent lower on an underlying basis following stronger trading in the previous quarter and tough comparisons with a year earlier.

The update prompted Freddie George of Cantor Fitzgerald to cut his 'top end of the range' forecast for profits this year from £805 million to £780 million.

Wickes owner Travis Perkins, which is a rival of Kingfisher, brushed off the downgrade as it slipped by just 8p to 1620p, while Homebase owner Home Retail Group was down by 1 per cent, or 2p at 172.3p.

There was also disappointment for investors in easyJet after the Luton-based carrier said annual profits would grow to between £545 million and £570 million, below the City's current consensus of around £572 million.

It has been hit by a rising fuel bill, while unrest in Israel and Egypt has also impacted on its performance. Shares were 5 per cent lower, off 70p to 1333p as the recent disappointing performance by the stock continued.

Elsewhere in the sector, British Airways owner International Airlines Group lifted 7.6p to 342.9p after it said it had reached a deal with unions to cut 1,427 jobs at loss-making Spanish carrier Iberia.

Among other risers, Barclays lifted 3.6p to 214.5p and HSBC added 13.7p to 621p. In the housebuilding sector, Barratt Developments cheered 2p to 371.1p and Persimmon improved 12p to 1306p.

Information company Reed Elsevier posted the biggest rise in the FTSE 100 after it reported underlying profits growth of 5 per cent for the first six months of the year. The stock was 41p higher at 980p as the company also disclosed a 5 per cent hike in its interim dividend.

In the FTSE 250 Index, Howden Joinery was 17 per cent higher in the wake of a sharp jump in half-year profits.

The biggest risers in the FTSE 100 were Reed Elsevier up 41p at 980p, Carnival up 50p at 2183p, International Airlines Group up 7.6p at 342.9p and HSBC up 13.7p at 621p.

The biggest fallers were Kingfisher down 27.5p at 308.5p, easyJet down 70p at 1333p, Petrofac down 45p at 1152p and Fresnillo down 21.5p at 919p.

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