Sector movers: Kingfisher, Dunelm, Home Retail pull retailers higher

16th Sep 2011 15:16

Kingfisher and Dunelm pulled the general retailing sector to the top of the pile on Friday, extending gains made yesterday on the back of some strong results.Kingfisher, the company behind the Screwfix and B&Q brands, was among the top risers on the FTSE 100 for the second day in a row after it announced Thursday that total sales increased 3.8% in the first half, while pre-tax profits rose 24%. A Charles Stanley note released today described the results as "strong [...] in difficult times". "Despite the challenging retail environment, profit growth was delivered in all three geographical segments, primarily reflecting a range of self-help initiatives," said Charles Stanley analyst Sam Hart. Homewares retailer Dunelm Group carried on rising after unveiling robust results yesterday, with revenue and pre-tax profit both up 9% for the year to 2 July. Meanwhile, Argos and Homebase owner Home Retail was the top performer on the FTSE 250, gaining 6.99%. Shares have declined steeply since June on the back of a poor performance at Argos. However, the firm revealed last Thursday the rate of like-for-like decline in Argos sales had slowed to 8.6% in the second quarter, from a fall of 9.6% in the first quarter. While shares are now over 10% higher over the last week at 117.9, they are around half the value of their 52-week high (235p) reached in June.In contrast, the technology hardware and equipment sector was among the worst performing sectors, dragged lower by ARM Holdings, the provider of chip technology for smartphones and other devices.Shares were lower after Goldman Sachs removed the firm from its 'conviction buy' list, according to Forbes, reflecting the stock's recent strong performance, with shares having risen nearly 16% in the last month. Nevertheless, the stock is still rated a buy."In our view, the recent outperformance was driven by anticipation of positive news flow for potential ARM adoption for Windows 8 at Microsoft's BUILD conference as well as continued M&A conjecture," said analyst Simon Schafer. "In the recent flight to quality, the stock outperformed given structural growth combined with first-quartile industry positioning."Also hurting sentiment could be results from Blackberry maker Research in Motion, which showed a 59% drop in second quarter net earnings, an even bigger fall than Wall Street analysts had been expecting. BCTop performing sectors so far todayGeneral Retailers 1,604.86 +2.68%Industrial Metals & Mining 5,765.39 +2.49%Life Insurance 3,702.18 +2.15%Fixed Line Telecommunications 2,110.14 +2.10%Forestry & Paper 5,881.16 +2.06%Bottom performing sectors so far todayElectronic & Electrical Equipment 2,715.04 -3.06%Technology Hardware & Equipment 736.69 -1.27%Health Care Equipment & Services 3,372.96 -0.78%Industrial Engineering 6,734.77 -0.36%