Strong gains from Aggreko, Morrison, Ocado and Home Retail pushed UK stocks higher on Thursday morning offsetting weakness in the heavyweight mining sector, as traders awaited the start of the EU summit and economic data from the States later on.
US banking giant Goldman Sachs yesterday hiked its near-term target prices for the FTSE 100, saying that the index would hit an all-time high of 7,200 within the next year due to easing in financial conditions in the UK and a fall in sterling.
Shavaz Dhalla, a financial trader from Spreadex, said this morning: "The report is sitting particularly well with investors as the general consensus prior to the report was that much of the optimism within the markets was based on sentiment instead of data. Thus, the bullishness from analysts is perhaps an indication that this year's rally is far from over."
Also spurring stocks was fellow bank JPMorgan which upwardly revised its forecast for US economic growth after yesterday's better-than-forecast retail sales for February. The bank expects US gross domestic product to expand by 2.3% in the first quarter, well ahead of its prior 1.5% forecast.
The retail sales figures saw US stock markets edge higher on Wednesday with the S&P 500
finishing at 1,554.5, just 11 points shy of its all-time high. Stock futures Stateside are pointing to a positive start when Wall Street opens in the coming hours ahead of jobless claims and producer-price inflation data.
Investors' attention will also be on the European Union summit in Brussels which begins today. A draft statement hinted that leaders could loosen deficit rules, giving nations like France, Spain and Portugal extra time to meet targets.
The statement, obtained by Bloomberg, reads: "Substantial progress is being made toward structurally balanced budgets and that progress must continue. The report also called for "growth-friendly fiscal consolidation".
FTSE 100: Aggreko jumps after contract win in Southern Africa
Temporary power and temperature control firm Aggreko was the best performer of the morning after winning contracts to supply122 MW of gas-fuelled power to utilities in Mozambique and Namibia from its facility at Ressano Garcia in Mozambique, the largest cross-border interim power plant in the world. Jefferies said that contract win is "very helpful for sentiment and applies upside risk to FY14F consensus earnings".
Supermarket giant Morrison reported its first annual profit decline in six years for 2012, but shares
rose after the company unveiled plans to launch a shopping website, tapping into the fast-growing online grocery market. The company said it was in talks with Ocado and will launch its online store in 2014.
Prudential, the insurance and pensions group, was extending gains made yesterday after a well-received set of full-year results.
Also on the rise was telecoms group Vodafone after saying that it planning to increase its focus on delivering an enhanced approach to customer engagement, founded on a new, Vodafone-owned marketing platform, to be developed and implemented throughout 2013. The news came as it decided to drop its sponsorship deal with McLaren.
FTSE 250: Ocado rockets on "game-changing" Morrison deal
The market celebrated Ocado's news of a potential partnership with Morrison. Richard Curr from Prime Markets said that the deal could be a "game changer" for the firm, as shares jumped as much as 20% in morning trade. The online grocer also revealed 14.4% rise in first-quarter sales in a separate statment.
After signalling higher-than-expected full-year profits earlier in the year, Home Retail, the owner of Argos and Homebase, further raised its guidance this morning after reporting a strong end to its financial year, causing shares to surge.
Wholesale group Booker was also a high riser after the Competition Commission provisionally approved its acquisition of fellow cash-and-carry chain Makro.
FTSE 100 - Risers
Aggreko (AGK) 1,938.00p +5.38%
Prudential (PRU) 1,168.00p +3.82%
Burberry Group (BRBY) 1,471.00p +2.72%
Standard Chartered (STAN) 1,763.50p +2.47%
Morrison (Wm) Supermarkets (MRW) 278.00p +2.36%
Legal & General Group (LGEN) 172.70p +2.19%
Sage Group (SGE) 348.70p +1.90%
TUI Travel (TT.) 321.30p +1.87%
Wolseley (WOS) 3,286.00p +1.73%
BT Group (BT.A) 270.40p +1.73%
FTSE 100 - Fallers
Rio Tinto (RIO) 3,312.50p -1.91%
Lloyds Banking Group (LLOY) 50.57p -1.56%
Vedanta Resources (VED) 1,153.00p -1.37%
Fresnillo (FRES) 1,464.00p -1.35%
G4S (GFS) 296.00p -1.30%
GKN (GKN) 274.40p -1.22%
Petrofac Ltd. (PFC) 1,516.00p -1.11%
Weir Group (WEIR) 2,448.00p -0.89%
Evraz (EVR) 249.00p -0.80%
Severn Trent (SVT) 1,633.00p -0.79%
FTSE 250 - Risers
Ocado Group (OCDO) 161.00p +17.18%
Home Retail Group (HOME) 146.20p +10.01%
Booker Group (BOK) 125.00p +7.76%
Kentz Corporation Ltd. (KENZ) 404.20p +6.93%
Savills (SVS) 592.00p +6.57%
Petropavlovsk (POG) 248.80p +4.32%
Brown (N.) Group (BWNG) 403.00p +4.05%
Perform Group (PER) 453.00p +3.19%
Dixons Retail (DXNS) 34.88p +3.07%
Salamander Energy (SMDR) 205.10p +2.86%
FTSE 250 - Fallers
Hochschild Mining (HOC) 300.40p -5.39%
Homeserve (HSV) 224.20p -3.90%
Ferrexpo (FXPO) 196.00p -3.69%
F&C Asset Management (FCAM) 107.10p -2.10%
Petra Diamonds Ltd.(DI) (PDL) 120.20p -2.04%
Lonmin (LMI) 324.40p -1.76%
Balfour Beatty (BBY) 265.40p -1.59%
Carpetright (CPR) 635.00p -1.55%
Beazley (BEZ) 209.50p -1.32%
Chemring Group (CHG) 259.60p -1.29%