THE FTSE 100 defied gloomy forecasts from the Bank of England to end the week at its highest value since early January.
The index closed up 99.6 points, or 1.6%, at 6304.3, despite the Bank's warning on Wednesday of slowing growth and a worrying level of inflation, close to 4%.
But encouraging news from Wall Street and strong performances from corporates such as
Tesco and British Airways helped the FTSE back to the healthier levels seen earlier this year.
Among this week's better performers was Tesco, whose shares rose nearly 2% to 434.5p after it confirmed it had bought 36 hypermarkets in South Korea for more than £950m.
British Airways stock fared well, rising 2% to 233p, following the announcement by BA boss Willie Walsh that annual profits rose 45% last year to £883m. Shares were unharmed by his revelation that he will not draw his bonus this year following the Terminal 5 opening fiasco.
This week investors will look for signs of how the retail and pubs sectors are coping with economic downturn, with a string of results from the likes of Marks & Spencer, Mothercare and Mitchells & Butlers.
Interim results from All Bar One owner Mitchells & Butlers (M&B) on Tuesday are likely to be overshadowed by interest in the results of the company's strategic review which followed the merger approach by competitor Punch Taverns earlier this year.
A number of merger options were explored but Punch walked away from the talks stating that "any transaction" with M&B would not be in the interest of shareholders.
The collapse came as a significant blow for M&B's management, which has been under pressure to find a merger partner or buyer after a failed property deal last year left it reeling from a £274m loss.
There have been fresh rumours of interest from individuals such as the Irish racing tycoons JP McManus and John Magnier, who have reportedly added to their position in M&B. Fellow shareholder billionaire property tycoon Robert Tchenguiz is also said to have added to his 23% holding in M&B.
Some analysts say this could leave M&B management in a sticky situation as McManus, Magnier and Tchenguiz may be trying to block private equity from seizing a large stake in the company. Meanwhile, M&B is thought to have been hit by this year's tough trading conditions and is expected to post operating profits of £159m, down from last year's figure of £161m.
Citywatchers are expecting it to be a very different story on Thursday when Mothercare is tipped to report a jump in annual profits of nearly 50%.
City consensus points to the mother and baby retailer reporting profits for the year to March 31 of £33.6m, up from £22.6m last year, helped by its acquisition of the Early Learning Centre and a surge in demand at its internet and catalogue arm.
Also reporting this week is Imperial Tobacco, the interim results of which on Tuesday are expected to be lit up by the growing strength of the euro and a first contribution from its acquisition of Spanish firm Altadis.
Investors will look for an update on the cost savings Imperial expects to make from the £11bn Altadis deal and how it intends to increase its synergy targets above ?300m (£239m).
The week aheadTOMORROW
Big Yellow Group, Homeserve, MITIE, PIK (finals); Care, ITE (interims); Wood (trading update); Standard Life (AGM)
TUESDAY
British Land, Dairy Crest, ICAP, KCom, Marks & Spencer, Yell (finals); Imperial Tobacco, Innovation, Mitchells & Butlers, Renew Holdings (interims); Brammer, Regus, Royal Dutch Shell, Segro, UK Coal (AGMs)
WEDNESDAY
Experian, Great Portland Estates, Thus (finals); Britvic (interims); Wolseley (trading update); 888 Holdings, French Connection, GlaxoSmithKline, SkyePharma (AGMs)
THURSDAY
Cable & Wireless, De La Rue, London Stock Exchange, Mothercare, Nationwide, Tate & Lyle (finals); Chrysalis, Grainger (interims); Friends Provident, John Menzies (AGMs)
FRIDAY
Marston's (interims); Aegis, Cairn Energy, Raymarine (AGMs)
The full article contains 661 words and appears in Scotland On Sunday newspaper.
