* FTSE 100 index up 0.7 percent
* M&S beat profit forecasts in quarterly report
* Trading thin ahead of tight U.S. elections
LONDON, Nov 6 (Reuters) - Britain's blue-chip stocks rose on
Tuesday, buoyed by some encouraging earnings reports but with
trade cautious ahead of a tight U.S. presidential election.
The FTSE 100 was up 39.26 points, or 0.7 percent, at
5,878.32 by 1145 GMT, after slipping 0.5 percent on Monday in
Marks & Spencer rose 1 percent after the bellwether
British retailer beat profit forecasts. Shares in the company
have risen 14 percent over the last three months, lifted by
persistent speculation regarding a possible offer from private
equity or a sovereign wealth fund.
The UK retail sector is facing significant headwinds,
demonstrated by a sharp deceleration of British retail sales in
October, according to the British Retail Consortium, and there
risk of profit taking on the share price.
Despite this, there are "a number of long-term drivers of
capital value and dividends that lead us to retain a positive
stance over a broader horizon," Clive Black, analyst at Shore
Capital, said, citing new channels in beauty and e-commerce
He also saw scope for substantial free cash flow in the long
term and potential from underpeforming core womenswear.
Technology firm ARM gained 3.5 percent on reports
that Apple may use the company's chips in their desktop
The company also said it would contribute $167.5 million to
a consortium to acquire the rights to a MIPS Technologies'
portfolio of hundreds of patents. ARM traded over 120 percent of
its average 90 day volume by 1120 GMT.
Elsewhere, InterContinental Hotels, the world's
biggest hotelier, also gained on the back of good results,
adding 1.7 percent after it unveiled operating profit of $167
million in the quarter to the end of September, marginally
beating consensus forecasts.
This came as the British-based group said it is opening up
talks on the sale of its New York Barclay hotel to a wider group
of prospective buyers after holding lengthy exclusive talks with
By 1130 GMT, trading volumes were at a mere 28 percent of
the 90 day average, which itself has been suppressed by weak
activity over the summer, as investors awaited the outcome of
Tuesday's presidential election in the U.S. before taking
"Markets will be very quiet today with traders watching the
U.S. elections above anything else," said Lex van Dam, hedge
fund manager at Hampstead Capital, which manages around $500
million of assets.
"The topic for the next two months will be how the
politicians are going to avoid the fiscal cliff (automatic
budget cuts) which might be easier if there is a clear winner
(Additional reporting by Tricia Wright. Editing by Jeremy
- Investment & Company Information