- Slight rise in the FTSE 100
- Shire jumps after rejecting £27bn AbbVie proposal
- TSB rises strongly after IPO
- Iran still in the spotlight as Obama sends advisers
techMARK 2,860.98 +1.67%
FTSE 100 6,825.20 +0.25%
FTSE 250 15,791.42 +0.69%
UK stocks ended the day slightly higher as investors opted to remain on the side lines given the dearth of macroeconomic news and as they awaited greater clarity on the situation brewing in the Ukraine and in the Middle East.
Nevertheless, at the sector level the recent rotation towards more defensive issues would seem to belie the underlying moderately cautious tone in the equity space.
The FTSE 100 finished the session 0.25% higher at 6,825.20.
For today at least the negative news out of Iraq seems to have died down a bit.
Of interest, Capital Economics wrote today to clients explaining to them that they see a benign scenario, under which the current conflict in Iraq abates and the price of oil declines, as the most likely. That comes after the US last night indicated that it has not taken the option of air strikes against the insurgents 'off the table'. In exchange, however, it has joined others' calls for political change in Iraq.
"The positive stance taken by Iran is already helping to improve relations between Iran and the West, or at least the EU, despite the reservations of Saudi Arabia and Israel. This could lead to an earlier lifting of sanctions on Iranian oil. More speculatively, the relative stability of the Kurdish area in the face of the insurgent threat could actually led to higher investment in the oil industry in that part of Iraq," the think-tank added.
In parallel, the conflict in Ukraine's eastern reaches seems to be intensifying, with heavy fighting having been reported near the city of Artemivsk, in the Donetsk region.
Data released today by the Office for National Statistics (ONS), the underlying public sector net borrowing requirement (PSNBR) for the UK came in at £13.3bn for May 2014, which was up from £12.6bn in May 2013.
Cable reached an intra-day high of 1.7062 ahead of next week's policy announcement from the Financial Policy Committee, but was rebuffed at technical resistance towards 1.7050.
A majority of the market seems to confide in the ability of the Monetary Policy Committee to raise rates gradually. However, and on a discordant note, BNP Paribas had this to say today: "If history is any guide, the Bank of England's Monetary Policy Committee will find it hard to raise rates as gradually in 2016 as it is currently suggesting."
Shire rebuffs AbbVie approach, healthcare stocks gain
Shares in Shire surged after the pharmaceutical group rejected a £27bn takeover approach by AbbVie, saying it "fundamentally undervalued" the company and its prospects.
Panmure Gordon hiked its target price for the stock on Friday, saying that the AbbVie's proposal was "barely adequate". The broker said that Shire's rare diseases business is one of the "hottest assets in biopharmaceuticals".
Pharma peers AstraZeneca and GlaxoSmithKline were also rising today, along with medical devices maker Smith & Nephew which itself has been at the centre of takeover speculation in recent months.
TSB, the high-street banking arm of Lloyds, put in a moderately decent performance on its first day as a listed company. Lloyds sold a bigger stake than expected in the initial public offer that was priced to go at 260p, above the mid-point of the 220-290p range set out earlier this month. The stock was up 14.6% at 294p by noon.
Mining stocks edged higher with precious metal producers Fresnillo, Randgold and African Barrick Gold rising strongly after gold prices hit a two-month high yesterday.
Vodafone continued to slide after Bank of America Merrill Lynch on Thursday downgraded the stock to 'neutral' and raised questions about Project Spring, the company's £19bn infrastructure investment programme. The stock was also hit by the news its Australian network had suffered a major failure, resulting in the comany offering a free weekend of data to its customers.
FTSE 100 - Risers
Shire Plc (SHP) 4,371.00p +16.93%
International Consolidated Airlines Group SA (CDI) (IAG) 384.60p +2.40%
Whitbread (WTB) 4,403.00p +2.40%
British Sky Broadcasting Group (BSY) 891.50p +2.29%
easyJet (EZJ) 1,452.00p +1.89%
Aggreko (AGK) 1,632.00p +1.75%
Randgold Resources Ltd. (RRS) 4,812.00p +1.65%
Fresnillo (FRES) 847.00p +1.44%
Imperial Tobacco Group (IMT) 2,705.00p +1.42%
Carnival (CCL) 2,299.00p +1.32%
FTSE 100 - Fallers
Melrose Industries (MRO) 262.00p -2.78%
CRH (CRH) 1,622.00p -2.11%
BG Group (BG.) 1,239.50p -1.63%
Vodafone Group (VOD) 191.85p -1.54%
Sainsbury (J) (SBRY) 316.80p -1.40%
Marks & Spencer Group (MKS) 433.70p -1.32%
RSA Insurance Group (RSA) 491.60p -1.25%
BT Group (BT.A) 387.80p -1.20%
St James's Place (STJ) 746.50p -1.19%
Admiral Group (ADM) 1,541.00p -1.03%
FTSE 250 - Risers
Barr (A.G.) (BAG) 672.00p +12.28%
Rank Group (RNK) 175.80p +10.57%
Restaurant Group (RTN) 598.50p +7.55%
IP Group (IPO) 199.90p +7.18%
Wetherspoon (J.D.) (JDW) 831.00p +6.20%
Cranswick (CWK) 1,281.00p +6.13%
Fisher (James) & Sons (FSJ) 1,384.00p +5.65%
Petra Diamonds Ltd.(DI) (PDL) 192.30p +5.08%
Genus (GNS) 1,141.00p +4.87%
Kier Group (KIE) 1,754.00p +4.65%
FTSE 250 - Fallers
Renishaw (RSW) 1,595.00p -7.54%
Foxtons Group (FOXT) 279.90p -5.60%
Electrocomponents (ECM) 268.70p -3.52%
Daejan Holdings (DJAN) 4,830.00p -3.13%
Carillion (CLLN) 331.40p -2.64%
AL Noor Hospitals Group (ANH) 1,018.00p -2.49%
BH Macro Ltd. GBP
Shares (BHMG) 1,920.00p -2.44%
Premier Oil (PMO) 335.20p -2.39%
BH Global Ltd. GBP Shares (BHGG) 1,162.00p -2.35%
Spirent Communications (SPT) 95.70p -2.10%