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FTSE LIVE: Shares steady near 13 year highs as Capita and G4S help bouy market

17.30 (CLOSE): The London market continued to defy gravity today as the FTSE 100 Index closed at its fourth-highest ever level.

The blue-chip index added another 48.2 points to close at 6803.9, gaining 0.7 per cent to reach a level not seen since December 1999, when the dotcom boom drove the FTSE to a record close of 6930.2.

A recovery in mining stocks added to central bank-induced euphoria, as investors move out of government debt and into riskier assets such as equities.

On the up: Despite profits falling to their lowest level in four years, M&S shares rose six per cent.

The FTSE 100 surged past landmark levels set in 2007 and 2000, as comments from the US Federal Reserve suggested the world's biggest economy may yet see more quantitative easing (QE).

The London market was also given a boost by strong US retail sales figures pointing to more signs of optimism in the country's vast consumer sector.

Alex Young, senior sales trader at CMC Markets, said investors are showing an 'impressive appetite for risk assets', despite the FTSE's meteoric rise.

  More... Stock market hits a near 13-year high as FTSE 100 claws back all the ground lost to the financial crisis GLOBAL MARKETS: Track the latest trends here Market report brought to you in association with Killik & Co. For market advice check out killik.com

On Wall Street, the Dow Jones Industrial Average gained as did the Dax in Frankfurt and the Cac 40 in Paris.

But the pound fell to a seven-week low against the dollar and struggled against the euro after weaker-than-expected UK inflation raised the prospect of more quantitative easing (QE) by the Bank of England.

Lower prices at the petrol pumps pushed inflation down to 2.4 per cent in April from 2.8 per cent in March, which economists said gives the Bank more scope to expand QE beyond its £375billion level. The pound was worth 1.52 dollars and 1.17 euros.

Retailer Marks & Spencer was among the risers today, gaining about 6 per cent, even though annual profits fell to their lowest level in four years due to a slump in clothing sales.

Underlying pre-tax profits for 2012/13 were £665.2million, a fall of 6 per cent on a year earlier but in line with market expectations.

Analysts were also comfortable with forecasts for the current year after chief executive Marc Bolland reported a steady start to the new period. Shares were 27.4p higher at 467.9p.

Outsourcing giant Capita made strong gains in the blue-chip index after striking a 10-year deal with mobile phone group O2, worth about £1.2billion over its lifetime.

The deal builds on an existing long-term tie-up with O2 and will see Capita run and manage its call centres. Capita said it has won new and extended business worth more than £2 billion so far this year, and the revenue upgrade sent Capita's shares surging 6 per cent or 56p to 1005p.

Home emergency business Homeserve was the biggest winner on the FTSE 250, despite setting aside £6million to cover a potential mis-selling fine from regulators.

Shares gained 10 per cent or 23.2p to 250.2p on investor relief that the boiler repair firm does not expect a bigger penalty from the Financial Conduct Authority for a mis-selling scandal.

The Walsall-based company also cheered investors with strong international expansion and heavy cost cuts in the UK, including about 700 job losses.

Mobile phone giant Vodafone gained on the FTSE 100 despite reporting its first drop in annual revenues for seven years as Europe's economic woes weigh.

Sales of £44.4billion for the year to March 31 were 4.2 per cent lower than a year ago, but shares in the company edged up 2.3p to 199.9p.

Security company G4S also made ground after it announced the departure of chief executive Nick Buckles in the wake of poor recent trading and the fall-out from the company's botched Olympics contract. Shares closed up 0.9p at 251.9p.

P&O cruise company Carnival was the biggest faller on the FTSE 100, slumping 6 per cent or 143p to 2267p, following a profits warning. The US-based firm slashed its full-year guidance due to weaker-than-expected revenues yields and higher costs.

The biggest risers on the FTSE 100 were Polymetal International 52p ahead to 669p, Marks & Spencer up 27.4p at 467.9p, Capital 56p ahead to 1005p and Burberry gaining 78p to 1541p.

The biggest fallers on the FTSE 100 were Carnival, off 143p to 2267p, Arm Holdings down 31p to 1065p, Royal Bank of Scotland down 9.7p to 342.2p and British Land down 15p to 643p.

15:45: The FTSE is trading close to a new 13 year high up 0.30 per cent at 6780,15 points behind its previous highest close of 6795 achieved in the last week in August 2000.

Outsourcing group Capita has continued to push gains this afternoon and is up 6 per cent at 1,000.2 p while Marks & Spencer is also still trading higher this afternoon up 5.3 per cent at 464.20p despite falling profits.

In the US Stocks are flat as markets await Federal Reserve Chairman Ben Bernanke's testimony to the Senate on Wednesday for clues as to when the Fed may begin tapering its bond-buying program.

Market Rally: shares in London continued their rally which saw them hit a 13 year high yesterday.

The Dow Jones Industrial Average is clinging to gains, up 0.13 per cent at 15347.11, as strength in retailer Home Depot and JPMorgan offset weakness in Travelers and Pfizer.

  More... Stock market hits a near 13-year high as FTSE 100 claws back all the ground lost to the financial crisis GLOBAL MARKETS: Track the latest trends here Market report brought to you in association with Killik & Co. For market advice check out killik.com

14:15

Shares in London are continuing to hang on to gains from yesterday and are trading up 8.07 higher at 6763.70 ahead of the open of the US stock market.

US futures were flat ahead of the open suggesting a quite day for the Dow Jones Industrial Average as investors awaited news from the Federal Reserve which will come on Wednesday when Fed Chairman Ben Bernanke will give evidence in his regular appearance in the US Congress.

Investors will be looking for any sign the Fed might be considering tapering its programme of quantitative easing which has pumped roughly $2trillion (£1.3trillion) into the US and global economies.

12:00

The London market has continued its upward climb today after the highest finish for the FTSE 100 Index since September 2000.

The top flight has crept to more gains, up 3.7 points to 6759.3, amid a recovery for mining stocks in the wake of losses across the sector yesterday.

Investors ploughing cash into shares at a time when alternative income streams remain scarce has sent the FTSE 100 surging past the more recent high of 6732 points set in June 2007.

Retailer Marks & Spencer is among the risers today, gaining almost 6 per cent, even though annual profits fell to their lowest level in four years due to a slump in clothing sales.

Underlying pre-tax profits for 2012/13 were £665.2 million, a fall of 6 per cent on a year earlier but in line with market expectations.

Analysts were also comfortable with forecasts for the current year after chief executive Marc Bolland reported a steady start to the new period. Shares were 26.1p higher at 466.6p.

Outsourcing giant Capita has also made strong gains in the blue-chip index after striking a 10-year deal with mobile phone group O2, worth about £1.2billion over its lifetime.

The deal builds on an existing long-term tie-up with O2 and will see Capita run and manage its call centres.

Capita said it has won new and extended business worth more than £2billion so far this year, and the revenue upgrade sent Capita's shares surging 7 per cent or 63.5p to 1012.5p.

Home emergency business Homeserve is the biggest winner on the FTSE 250, despite setting aside £6 million to cover a potential mis-selling fine from regulators.

Shares  havegained almost 12 per cent, or 27p, to 253.8p on investor relief that the boiler repair firm does not expect a bigger penalty from the Financial Conduct Authority for a cold-calling scandal.

The Walsall-based company has also cheered investors with strong international expansion and heavy cost cuts in the UK, including about 700 job losses.

Security company G4S has lost some steam after it announced the departure of chief executive Nick Buckles in the wake of poor recent trading and the fall-out from the company's botched Olympics contract. Shares were 1.3p lower at 249.7p.

P&O cruise company Carnival has been the biggest faller on the FTSE 100, slumping 11.4 per cent, or 275p, to 2136p, following a profits warning. The US-based firm slashed its full-year guidance due to weaker-than-expected revenues yields and higher costs.

Carnival suffered a major blow in 2012 when the Costa Concordia ran aground with thousands of passengers on board off the coast of Italy - claiming 32 lives. Since then, Carnival has been dogged by further problems on its cruise ships.

10:45am

Shares on London's blue chip index are just about hanging on to recent gains hovering around a 13 year high as rallies in outsourcing companies Capita and G4S  have continued to offset a sharp fall in cruise operator Carnival Corporation. The FTSE is lower by 0.67 per cent at 6754.96. but this is still higher than any point it has been at since September 2000.

Inflation data also came in lower-than-expected with CPI showing a fall to 2.4 per cent in April, from 2.8 per cent in March, according to the Office for National Statistics, against forecasts of 2.6 per cent.

Last week, the Bank of England's outgoing governor Mervyn King said it would be two years before inflation would be close to the central bank’s 2 per cent.

08:00am (Open)

The FTSE 100 is holding steady near to a 13-year high in early trade as rallies in outsourcing companies Capita and G4S  have helped offset a sharp fall in cruise operator Carnival Corporation.

Capita rose 6.3 per cent to an all-time high and topped the FTSE 100 after the group secured a 10-year deal worth around £1.2billion allowing it to raise its outlook. 

'Capita is now clearly going to deliver strong organic growth through 2013,' Espirito Santo's analysts said in a note.

Fellow outsourcer G4S is 1.2 per cent higher after saying its chief executive Nick Buckles, under whose stewardship the group suffered a series of setbacks and issued a profit warning, will step down.

Retailers Burberry and Marks & Spencer have also risen 1.7 per cent and 2.6 per cent respectively after reporting estimate-beating results.

They helped the FTSE 100 add 8.8 points, or 0.1 per cent, to 6,764.27 points, its highest since September 2000.

Gains have been curbed by a 13.7 per cent fall in Carnival, which slashed its revenue outlook after lowering prices to lure customers following a series of major incidents.

One of its ships capsized off the Italian coast last year and in February another was adrift for five days in the Gulf of Mexico following an engine fire.

'We had been over-optimistic in our view that Carnival could produce a solid full-year 2013 outturn,' analysts at Investec said in a note, cutting their target price to 2,550p from 2,800 but keeping their 'buy' stance on the shares.

The FTSE has rallied 8.5 per cent since mid-April as monetary support from central banks allowed investors to discount patchy global economic data and a lacklustre earnings season, which has seen 53 per cent of European companies miss expectations so far.

'The disparity between the macroeconomic environment and the central bank-led rally is getting slightly bigger,' Dan Reed, head of contract-for difference trading at Beaufort Securities, said.

He was selling the FTSE betting on an intra-day retracement to 6,720, the index's close on Friday, but said dip-buyers could come back and force him to close his negative bets.

STOCKS TO WATCH:

VODAFONE : The world's second largest mobile operator posted its largest ever quarterly fall in key organic service revenue, prompting it to keep hold of a dividend from its U.S. arm and reinvest it into the business and not return it to shareholders. The 4.2 per cent fall in organic service revenue was in line with forecasts.

BURBERRY : The British luxury group posted a 14 per cent rise in full-year pretax profit, ahead of analysts' expectations. It also said profit for the first half of its new fiscal year would be below last year's as it reduces its wholesale business in favour of retail markets.MARKS & SPENCER : The British retailer posted its lowest annual profit since 2009 as a struggling general merchandise division dragged on growth in food sales. With a profit before tax and one-off items of £665.2 million, M&S still managed to beat consensus of £658 million.G4S: The British outsourcing group said its chief executive Nick Buckles would step down and be replaced by Ashley Almanza at the end of May after a string of setbacks at the firm which have hit its reputation. CAPITA: The firm said it now expects to achieve greater-than-anticipated organic growth for the full year 2013, adding it has visibility on at least 8 per cent organic revenue growth.

BRITISH LAND: The real estate group signed a letting deal with Amlin for a London skyscraper.INVENSYS: The company announced the terms of the return of £625million  to shareholders.HOMESERVE: The firm reported a 17 per cent fall in full-year profit.BWIN.PARTY: The online gambling company said it aimed to deliver savings of €70 million (£59million) this year as it shifts to operating in fewer but better regulated markets.LONDON STOCK EXCHANGE: Shares in the exchange operator rose 1.9 per cent on Monday, with the Daily Mail attributing the move to talk that the LSE is considering acquiring a stake in Istanbul's bourse.SHIRE: The drugs group rose 1.8 per cent on Monday, with The Daily Express citing "rehashed bid gossip".SSE: The utility group rose 2.8 per cent on Monday. The stock was helped by vague private equity takeover talk, according to The Daily Mail.ROYAL BANK OF SCOTLAND: The bank is not trying hard enough to lend to the country's small and medium-sized companies, the UK Business Secretary, Vince Cable said, according to The Times.


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