Footsie in the black as Asda eyes Home Retail Group bid

Talk of a potential bid by supermarket chain Asda – whose chief executive Andy Bond is moving to a part-time chairman role – saw Home Retail's shares top the risers' board, adding 133/4p to 2941/4p, or 5 per cent.

The wider Footsie closed the day 6.67 points higher at 5777.65 after having briefly climbed above 5800 on news of a Greek bail-out plan agreed by European finance ministers.

Wall Street's Dow Jones Industrial Average also took some heart from the news – trading above 11,000 – although markets had already rallied before the weekend on hopes of a rescue.

This helped the euro strengthen against the dollar, although the European single currency largely held firm against the pound, at 1.13 euros. Sterling was up against the dollar at 1.53.

US investors were anxious, however, waiting to see if corporate results would be enough to move stocks higher, given Wall Street's recent strong run.

The S&P 500, which is up 7 per cent since the start of the year, rose to within one point of the 1,200 level, seen as an area of technical resistance.

Aluminum company Alcoa gained 1.9 per cent to $14.68. The Dow component kicks off the first-quarter reporting period with results after the bell. Analysts expect the company to post a first-quarter profit of 10 cents per share, reversing its loss in the same period last year of 59 cents a share. In London retail stocks were in favour, helped by the bid talk over Home Retail Group.

Asda is understood to be eyeing a number of firms both on the high street and in out-of-town shopping parks, including Home Retail and budget clothing chain New Look, although Asda has declined to comment.

Asda owner Wal-Mart saw shares slip on Wall Street as investors feared an expensive acquisition trail.

Elsewhere in the sector, fellow DIY giant and B&Q parent Kingfisher also received a boost from investor attention, up 21/8p to 2321/2p.

Fashion chain Next was a solid performer, adding 32p to 2303p to continue its strong recent run.

Sainsbury's joined them on the risers' board as it rallied by 2 per cent, or 81/4p to 3465/8p. Bank of America Merrill Lynch upgraded the stock to buy and said the retailer was well placed due to its roll-out of non-food and the addition of new space.

Marks & Spencer was another beneficiary of positive broker comments after Seymour Pierce issued a buy rating in the wake of last week's fourth quarter trading update, which was better than expected.

It said there was momentum in the business and predicted that new chief executive Marc Bolland will have a positive impact on the food operation, which helped M&S shares rise 55/8p to close at 3753/4p.

Banks were likewise on the front foot, with Barclays up 81/8p to 3645/8p – helped by market expectations for storming trading results in the wake of first quarter figures from Swiss banking group UBS.

Royal Bank of Scotland was also making gains, up 1/4p to stand at 447/8p.

In a quiet day for results news, political pollster YouGov fell 6 per cent, or 21/2p to 361/4p after it revealed a 42 per cent plunge in underlying half-year profits.

The four biggest Footsie risers were Home Retail Group, Sage which rose 63/4p to 257p, Sainsbury's and Barclays.

The four biggest Footsie fallers were Arm Holdings off 91/4p to 2343/4p, British Airways down 51/4p to 2423/4p, Intertek off 31p to 1470p and Fresnillo which closed the day 17p lower at 867p.