Fresnillo shines as commodities recover, but Marks & Spencer leads retailers lower

Commodity prices have had a volatile week, taking another hit yesterday after China acted once more to cool its economy, but they are showing signs of bouncing back.

Gold and silver - recently falling from speculator-fuelled record highs - have edged up this morning. Gold is up around $8 an ounce while silver has risen just over $1. So silver miner Fresnillo has recovered 25p to £13.29, while a rise in the copper price has lifted Kazakhmys by 20p to £12.49. Elsewhere Eurasian Natural Resources Corporation has climbed 14p to 854p.

So with the recovery in commodity prices and with strong growth announced this morning by both France and Germany, the FTSE 100 is currently 50.81 points higher at 5995.77.

But retailers have slipped back, following uninspiring weekly figures from John Lewis. Kate Calvert at Seymour Pierce said:

John Lewis department stores reported total weekly sales down 1.4% including VAT. Both stores and on-line showed good sales growth of fashion with sales up 4.9%. The 'Kate effect' has now been replaced by the 'Pippa effect' with long, flowing, green and champagne-coloured dresses sought, after delivering the highest sales in this department for 4 years.

With regards to the retail sector, results this week highlight that it is still tough out there. As more typical trading conditions return, most retailers are nervous that sales have been sucked forwarded into April and that underlying consumer demand will still be weak. We would not be surprised if the sector drifts back in May after the recent market outperformance, particularly the non-food retailers as consumer confidence still remains worryingly low.

Marks & Spencer Next

But Whitbread is topping the FTSE 100 risers, up 54p at £16.87 on renewed talk of a possible move to spin off its Costa coffee business. The division hosts an investor presentation next week and RBS analysts yesterday said:

With few intra-group synergies, we believe it's less a question of if and more when will Costa be spun out of Whitbread. The upcoming Costa investor conference should provided greater visibility, with a likely positive valuation impact on Costa, and Whitbread. Our analysis suggests Costa is self-funding.

With this nervousness, is down 4.9p at 397.3p and has slipped 13p to £23.09.