Tonight:
5°c
Shares in London extended their winning streak for a seventh day today, as investors looked beyond dire economic data and swine flu to focus on the eventual recovery.
It is the first time since July 2005 that the FTSE 100 index has risen for seven consecutive days.
The benchmark added 36.91 points to 4480.53 despite figures revealing the desperate state of the nation's coffers and growing concerns over the impact of the virus on UK Plc.
Even rumours that banking giant HSBC — 9.7p lower at 549.2p — is about to guide the market lower were shrugged off.
But volumes in London remained light, with only 600 million shares in FTSE 100 companies changing hands by late afternoon.
New York followed London's lead with the Dow Jones opening 60.46 points higher at 8908.61.
After Goldman upped its forecasts yesterday for the S&P 500, Credit Suisse fuelled optimism in the City and on Wall Street today by following suit. The broker is advising clients to revert to an overweight position in equities, and has upped its target for the S&P from 920 points — a target set in February's dark days — to 1050. But don't swap your Cava for Cristal just yet — Credit Suisse's economists say they believe we are halfway through the first “V” of an upward-sloping W-shaped recovery, so there is a second slump ahead for the global economy.
Wm Morrison, up 25p to 278¼p, was the biggest winner among top stocks as the supermarket chain proved it is still clawing customers away from its rivals. The UK's fourth-largest grocer said it expects to smash current predictions for full-year profits of around £665 million after bumper sales in the second quarter. Brokers reckon it will beat these forecasts by between £50 million and £80 million.
Merrill Lynch has upped its profits forecasts to £750 million and advises stocking up on the shares. Although Merrill says the heatwave gave a boost to sales at the start of the summer, it reckons Morrisons remains the best-performing supermarket.
Meanwhile, Cazenove has raised its forecasts for profits to £729 million. The broker noted this is a welcome return to upgrades for Morrisons, which many feared was running out of steam on sales growth.
Morrisons' good news spilled over into the other supermarkets, with Sainsbury's 12p ahead at 328¼p and Tesco 7.3p stronger at 377.3p.
But the update from Next, whose shares dropped 26p to 1618p, pushed the rest of the retail sector lower, with Kingfisher falling 5¼p to 201¾p and Marks & Spencer dipping 2¼p to 327¾p in sympathy.
Now is the time to buy British Airways. So says Goldman Sachs at least, which today upped its rating on the long-suffering UK flag carrier from sell to buy.
Goldman believes the airline's improved balance sheet has left its shares looking cheap. BA, which crashed into the red by £401 million last year, announced plans last Friday to raise more than £600 million through a deal with the trustees of its pension fund and by launching a convertible bond.
Goldman says passenger numbers have now been stable for three consecutive months — both for cheap seats and in first and business class, where BA makes the bulk of its money.
Analysts also reckon BA's cost-cutting programme has been more vigorous than its peers and highlights the savings a merger with Iberia would bring.
But don't expect a turbulence-free ride: Goldman has lowered its 2010 earnings forecast to reflect a higher fuel bill. BA's shares — which have crashed 42% in the last 15 months — today climbed 3.4p to 136.2p.
Gambling stocks got a kicking after a miserable update from Playtech, the supplier of software to the sector. Its shares plummeted 119¼p to 333p, William Hill sank 10p to 190¼p and PartyGaming fell 7½p at 239½p.
Diageo shareholders will be raising a glass to the Chinese tonight after the drinks giant confirmed that the government-backed China Investment Corporation has taken a 1% stake in the company, sending its shares surging 17½p to 902½p. The holding is worth around £224 million.
Among small caps, the founder of Daisy Communications must have had his best-ever day in the office after floating the telecoms company on Aim today. Matthew Riley set up Daisy eight years ago, and floated it through a reverse takeover by another telecoms firm Freedom4.
Riley received £27.6 million in cash from Daisy and 24% of shares in the new company whose shares rose 3p to 85p.
