- Markets at highest level since October 30th
- UK inflation falls to BoE target
- Eurozone industrial production, US retail sales beat forecasts
- UBS highlights potential M&A at BSkyB
techMARK 2,818.48 +0.54%
FTSE 100 6,766.86 +0.14%
FTSE 250 16,236.02 -0.12%
Markets managed to finish in positive territory on Tuesday despite a poor start, as bid speculation surrounding BSkyB and strong gains in the banking and pharmaceutical sectors lifted the FTSE 100.
Meanwhile, investors were also reacting to a surprise fall in UK inflation, an acceleration in industrial production growth in the Eurozone and better-than-expected US retail sales.
"What looked like a dismal start to the session soon turned into a significant reversal, with investors' appetite for risk not yet saturated from what has been a stellar 2013 for stocks," said David White, Trader at Spreadex.
London's benchmark index finished 9.71 points higher at 6,766.86, its highest closing price since October 30th.
After hitting an intraday low of 6,694.08 early on, the FTSE 100 had largely pared losses by midday after consumer price index (CPI) figures showed that the annual rate of UK inflation had nudged down to the Bank of England's 2% target in December, from 2.1% the previous month.
Meanwhile, industrial production in the Eurozone rose at a year-on-year rate of 3% in November, up from a revised 0.5% in October and ahead of the 1.8% gain expected. US retail sales increased by 0.2% in December, slowing from a revised 0.4% fall in November but ahead of analysts' forecasts for a 0.1% rise.
Gains in London were also bolstered by a strong start on Wall Street as US stocks recovered after a sharp sell-off the day before. The US bank reporting season got off to fairly quiet start today with bellwethers JPMorgan Chase & Co and Wells Fargo & Co trading broadly flat after their quarterly results.
BSkyB up on M&A speculation
Broadband and pay-TV group BSkyB was the strongest performer of the day after UBS upgraded the stock to 'buy', saying that competitive concerns have been priced in and growth opportunities are now being overlooked. It also sees M&A upside in the stock, speculating about a possible merger by Fox to create 'Sky Europe' and even a mobile merger with either Vodafone UK or O2 UK.
AstraZeneca and Shire were also providing a lift on the FTSE 100 after the pharmaceutical peers both gave upbeat outlooks. AstraZeneca said that it expects to return to growth sooner than analysts currently predict, while Shire raised its earnings guidance for 2013 to the upper end of previous expectations.
The banking sector was also in demand, with stocks extending gains made yesterday when Basel eased rules in regards to capital requirements. Standard Chartered, Lloyds, Barclays and RBS were all higher by the close.
Ashmore, the UK fund manager that invests in emerging markets, said assets under management fell 4.1% during the quarter ended December 31st amid continued market volatility, pressuring the stock as much as 12% lower in morning trade.
Financial peers Schroders, Aberdeen Asset Management, Old Mutual and Henderson were also falling sharply.
UK recruitment agency Michael Page was heading lower after reporting a 1.2% fall in fourth-quarter gross profit as companies remained reluctant to take on permanent staff.
Oil engineering firm AMEC pulled back after a strong rise the day before following the proposed takeover of Swiss rival Foster Wheeler. Tullow Oil was also retreating as recent bid speculation subsided ahead of the firm's trading update tomorrow.
FTSE 100 - Risers
British Sky Broadcasting Group (BSY) 871.00p +3.75%
Shire Plc (SHP) 2,991.00p +2.75%
Sainsbury (J) (SBRY) 360.50p +2.65%
AstraZeneca (AZN) 3,755.50p +2.51%
ITV (ITV) 207.30p +2.22%
ARM Holdings (ARM) 997.00p +1.94%
Standard Chartered (STAN) 1,315.00p +1.78%
Royal Mail (RMG) 597.00p +1.70%
Lloyds Banking Group (LLOY) 85.33p +1.55%
Hargreaves Lansdown (HL.) 1,508.00p +1.55%
FTSE 100 - Fallers
Amec (AMEC) 1,067.00p -3.44%
Intertek Group (ITRK) 2,993.00p -2.48%
Tullow Oil (TLW) 856.50p -2.45%
William Hill (WMH) 372.00p -2.29%
Sage Group (SGE) 393.60p -2.02%
Schroders (SDR) 2,547.00p -1.66%
Aberdeen Asset Management (ADN) 453.10p -1.48%
Prudential (PRU) 1,350.00p -1.46%
Sports Direct International (SPD) 738.00p -1.27%
Coca-Cola HBC AG (CDI) (CCH) 1,777.00p -1.17%
FTSE 250 - Risers
Partnership Assurance Group (PA.) 327.70p +4.16%
QinetiQ Group (QQ.) 236.70p +4.04%
Imagination Technologies Group (IMG) 182.40p +3.93%
Greencore Group (GNC) 235.70p +3.65%
CSR (CSR) 695.00p +2.96%
African Barrick Gold (ABG) 189.60p +2.93%
Homeserve (HSV) 302.90p +2.92%
esure Group (ESUR) 269.00p +2.91%
Kenmare Resources (KMR) 19.15p +2.68%
Rank Group (RNK) 143.60p +2.57%
FTSE 250 - Fallers
Ashmore Group (ASHM) 358.00p -12.43%
Ted Baker (TED) 2,225.00p -4.38%
JD Sports Fashion (JD.) 1,566.00p -3.81%
Brewin Dolphin Holdings (BRW) 316.00p -3.51%
Countrywide (CWD) 599.00p -3.23%
Ocado Group (OCDO) 524.50p -3.05%
Henderson Group (HGG) 229.40p -2.55%
Foxtons Group (FOXT) 338.00p -2.45%
AL Noor Hospitals Group (ANH) 869.00p -2.36%
Michael Page International (MPI) 478.00p -2.27%