Upbeat report boosts world markets

An upbeat report on retail sales in the US has boosted investor confidence in the global economic recovery and lifted world markets.

Wall Street’s Dow Jones Industrial Average was up 1% after the US Commerce Department reported that retail sales rose for the fifth straight month in November.

The positive sentiment filtered over to London where the FTSE 100 Index added 20 points to 5880.5. Elsewhere, the DAX in Germany was up 1.1% and France’s CAC-40 was 2.7% ahead.

Official figures revealed the rate of inflation increased to 3.3% in November but this had little impact on the stock market or the pound, which dropped against the euro and US dollar.

Whitbread topped the FTSE 100 fallers board despite posting figures in line with expectations.

The leisure group dropped more than 2% after another strong performance from coffee shop chain Costa was offset by a deterioration in sales trends at the company’s Beefeater and Brewers Fayre restaurants business.

Robust growth at Premier Inn means Whitbread remains on course for strong profit growth in this financial year, but shares still dropped 38p to 1752p.

In the FTSE 250 Index, flooring firm Carpetright fell 26p to 770p after it reported a 28% drop in half-year profits to £10 million and said it did not expect a pick up in trading conditions in 2011.

Shares dropped even though analysts said today’s interim results were in line with market expectations.

Back in the top flight, BP posted the sharpest gain, climbing nearly 3% – or 12.7p to 471p – amid vague market talk about takeover interest from Royal Dutch Shell and after it entered into an agreement to sell almost all of its exploration and production assets in Pakistan to United Energy Group.