The FTSE this morning touched its highest point since 2000 and UK blue chips remained buoyant despite fears that Wall Street’s opening would see the Dow Jones give back some of the gains that took it to a record high.
At midday the FTSE 100 was 20 points ahead at 6,717.7, having retreated slightly from its high of 6,754.1. Other indices were also heady, including the FTSE 250, up 94.2 at 11,903.2.
Yesterday’s mining sector gains added muscle across the board in London, with Man Group, the hedge fund manager, topping the blue-chips, up 14p to 630.5p following yesterday’s strong first-quarter trading update and healthy outlook for the full-year.
UK life insurers also did well, with Aviva up 7.5p at 761p, Old Mutual up 3.1p at 172.8p, and Resolution up 2p at 639.5p after Morgan Stanley said that there could be a powerful rally in the sector if, as its UK economist suspects, the Bank of England considers a year-end cut in interest rates.
Shares in Barclays were up 6p at 724.5p following the Dutch Supreme Court’s ruling that ABN Amro is allowed to sell its US unit LaSalle to Bank of America Corp without a shareholder vote. Analysts consider the ruling will make the Royal Bank of Scotland-led consortium less likely to win in the battle to buy ABN. RBS was up 4p at 638.25p.
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Cadbury Schweppes dropped 6p to 657.5p, as it waited for a verdict from Birmingham Crown Court over salmonella contamination in some products last year.
Miners also fell back after yesterday’s strong gains over M&A rumours.
Rio Tinto, which suffered after announcing the acquisition of Alcan, fell 10p further to £38.00 after ABN Amro downgraded the shares to ’hold’ from ’buy’. Antofagasta was down 7.5p at 708.5p, Lonmin slipped 27p to £43.23, and BHP Billiton lost 10p to £15.44.
Royal Dutch Shell was 21p lower at £21.18, as the price of oil slipped back slightly.
Among the midcaps, Quintain Estates & Development was among the top gainers,up 37p to 892p, after news property investor Paul Kemsley has sold his 11.9 per cent holding to Uberior Ventures, HBOS’s property investment arm, according to the Financial Times.
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The stake buy will likely cause speculation of a bid for Quintain, said the FT.
Emap was strong in early trading, up 9.5p at 836.5p, after news the media group is talking to Channel 4 about selling half its television operations for about £30m.
Shares in Aegis Group were up 6p at 142p, after the media and marketing company won the media buying and planning account for Johnson & Johnson (J&J) worth about $440m in billings, with UBS reiterating its ’buy’ rating and 170p target.
Britvic bucked the FTSE 250 upbeat trend, down 11.25p, at 356.25p, making it the worst-performing midcap, as Altium Securities gave it a ’reduce’ recommendation and a target price of 330p.
Altium said it believes the long-term decline in carbonated drinks will continue.
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The fizz also came out of C&C Group, down €1.55 to €8.55, as the summer rains also hit the Magners cider producer, which warned in today’s AGM that very poor weather in June and into July together with continued heavy price-led competition is likely to lead to a weak second quarter.
On the macroeconomic front, Charlie Bean, the Bank of England’s chief economist, said that rate-setters should be wary of targeting asset prices alongside, or instead of, inflation. Bean also warned that lifting borrowing costs to reduce debt could seriously damage the economy.