Hammering for Marks & Spencer shares
Marks & Spencer shares took a hammering after it said profits would be hit from efforts to overhaul its beleaguered clothing business.
The high street bellwether was the biggest faller on the London market, slumping more than 10%, as new boss Steve Rowe unveiled his overhaul plans as the group posted a 4.3% rise in underlying pre-tax profits to £689.6 million for the 53 weeks to April 2.
But the FTSE 100 Index still closed 43.6 points higher at 6262.9, as it shrugged off the retailer's gloomy update thanks to a rally from the banking stocks.
Heavyweight financial stocks were in the ascendency after the market priced in the earnings boost of a potential US interest rate rise in the summer.
Lloyds Banking Group rose 1.3p to 73.7p, Standard Chartered climbed 18.6p to 554.6p, while Royal Bank of Scotland was the biggest riser, surging more than 4% or 10.7p to 256p.
HSBC was also on the up, rising 12.2p to 446.4p, after it moved to strengthen its capital base by raising two billion US dollars (£1.4 billion) from selling perpetual subordinated contingent convertible securities.
Oil giant BP stepped up 8.2p to 366p as Brent crude rose to its highest level for seven months at 49.34 US dollars a barrel, before dropping back to 49.20.
Rival Royal Dutch Shell also benefited from the oil price uplift, up 35p to 1696.5p, as it announced it would axe a further 2,200 jobs from its global workforce because market conditions remained "challenging".
Across Europe, Germany's Dax was 1.5% higher and the Cac 40 in France rose 1.1% in the wake of Greece winning an essential batch of bailout funds from international creditors following an agreement among the 19 eurozone finance ministers.
Sterling rose 0.5% against the US dollar at 1.470, amid further economic warnings over Brexit, with the Institute for Fiscal Studies publishing a report stating that Britain would have to stomach two more years of austerity if it left the European Union.
The pound was also 0.4% higher against the euro at 1.317.
In stocks, M&S was 45.3p lower at 399.4p as the group said investment in its revamp as well as tough conditions on the high street would "have an adverse effect on profits in the short term".
The firm also dealt a blow to 11,000 staff as it announced plans to close its final salary pension scheme for future service accrual to existing members, having already closed it to new members since 2002.
High street rival Next was also dragged lower by the results, slipping more than 1% or 75p to 5435p.
Royal Mail raced ahead after c ommunications regulator Ofcom stopped short of imposing price controls on the firm following a review into the postal market.
Ofcom said the declining letters market and increased competition in parcels means it sees no need to "impose new price controls on Royal Mail's wholesale or retail products".
Shares were up more than 1% or 5.5p to 526.5p.
Dixons Carphone was 0.5p lower at 447.6p despite batting away fears of a high street slowdown after posting a strong set of results for the fourth quarter and raising its profit guidance for the year.
The retailer said it expects profits to come in at between £445 million and £450 million, 17% more than last year.
The biggest FTSE 100 risers were Royal Bank of Scotland up 10.7p to 256p, IAG up 19.5p to 551p, Standard Chartered up 18.6p to 554.6p, Glencore up 3.7p to 133.4p.
The biggest fallers were Marks & Spencer down 45.3p to 399.4p, Intertek Group down 185p to 3112p, DCC Plc down 185p to 6510p, Taylor Wimpey down 5.7p to 204.6p.