Rise in shares hints at end to Britain's double-dip recession

Thursday 25 October 2012

London's leading shares index stood still today as investors heeded warnings that figures showing an end to Britain's double-dip recession masked weak underlying health.

The FTSE 100 Index had been higher after the Office for National Statistics revealed a higher-than-expected 1% surge in gross domestic product (GDP) in the third quarter.

But the top flight pulled back to close flat at 5805.1 as analysts warned the bounce-back was driven by one-off factors such as the Olympics and growth would slowdown in the quarters ahead.

The strong headline figure did boost the pound, however, which rose to 1.61 against the US dollar and 1.24 against the euro.Miners reversed gains towards the end of the session with Evraz sinking to the bottom of the FTSE 100 Index, dropping 14.9p to 235.4p, while Eurasian Natural Resources dropped 8.2p at 333.4p.In a busy day for corporate news, households goods giant Unilever was among the biggest blue-chip risers after beating expectations with a 5.9% rise in underlying sales.The Hellmann's and Dove soap maker rose 2% or 45p to 2310p after the third quarter update.Banks were also on the risers board despite a hefty profits drop at Spanish-owned Santander.Parent group Banco Santander reported a 94% plunge in third quarter profits as it took a hit on real estate losses in Spain, while its UK arm also came under pressure after falling profit margins left profits 27% lower.But Barclays brushed this aside, rising 2.95p to 232.9p, and Lloyds Banking Group was also ahead, up 0.2p to 40.7p, an improvement of 1%.Advertising and marketing giant WPP was among the fallers, down 2%, or 18.5p to 789.5p, after it cut its full-year growth outlook for a second time in three months due to fears over the prospects for trading in the United States and Europe.Debenhams surged to the top of the FTSE 250 Index risers board after it reported a 4.2% rise in pre-tax profits to £158.3 million for the year to September 1. The figures were accompanied by plans for another 17 UK stores over the next five years. Shares jumped 9%, or 10p to 119p, and helped other retail stocks to make headway.They included JD Sports Fashion, which lifted 12p to 752p, and Dixons Retail Group with an improvement of 0.3p to 21p.Details of a 42% hike in five month profits for ASOS failed to boost shares as the online retailer poured cold water on market talk of a bid by internet giant Amazon. The stock dropped 7%, down 167p to 2326p.Harry Potter publisher Bloomsbury was also lower, down 5% or 6.8p to 131.8p, after reporting a 42% drop in first-half profits to £850,000 as global demand for best-selling phenomenon Fifty Shades of Grey saw it lose out to rivals.The biggest Footsie risers were Carnival up 74p at 2505p, Fresnillo ahead 41p at 1930p, Aggreko up 43p at 2089p and Unilever ahead 45p at 2310p.The biggest Footsie fallers were Evraz down 14.9p at 235.4p, Eurasian Natural Resources off 8.2p at 333.4p, WPP down 18.5p at 789.5p and Kazakhmys off 14p at 736p.

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Rise in shares hints at end to Britain's double-dip recession

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