The FTSE 100 recorded its longest weekly winning streak since November on Friday, although investors will continue to worry that an overheating economy could lead the Bank of England to pull back asset purchases earlier than expected.
The blue-chip benchmark finished the day 0.4% higher at 7,218.71, led by healthcare stocks, up 2.1%. Dollar-earning consumer staples stocks, including Unilever (ULVR), Reckitt Benckiser (RB.), British American Tobacco (BATS) and Diageo (DGE) gained between 0.5% and 0.8%.
These highs come as investors continue to hold record levels of equities and pump money into value trades, especially stocks in the financial sector and in Europe, according to this week’s Flow Show report from Bank of American Merrill Lynch.
The study showed that clients of the investment bank had upped their allocation to equities to a record high of 65%, with cash flowing into financial and basic materials shares during the past week, the statistics showed.
The more domestically-focused FTSE 250 closed at 0.2% up at 23,788.45, a new all-time high.
Wall Street is on course to end the week near record highs, though the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite had deflated back to near flat in early US trading.
Gold was largely flat at $1,755.5 following yesterday’s strong producer price inflation print in the US, while bitcoin continued its recent weak run at £33,406.95, or $46,170.90.
COMPANIES MAKING HEADLINES
Defence and protection firm Avon Protection (AVON) narrowed earlier losses but still chalked-up a 28% plunge to £21.32 after warning on performance for its current and next financial year following a delay in orders under existing contracts owing to COVID-19 related and supply chain disruptions.
‘Whilst this COVID-19 related disruption is expected to be temporary in nature, the impact has resulted in a reduction in our revenue guidance for full year 2021 to between $245 million to $260 million,’ said the company.
The cut to guidance came on the back of good progress in the second half of full year 2021, with order intake in the ten months to 31 July 2021 rising 13% to $221 million year-on-year, lifting the order book value to $146 million, up 21% year-on-year.
‘We have made considerable commercial progress over the last 18 months in building a broad portfolio of significant, multi-year contracts across the business, with the underlying demand momentum continuing, so the short-term disruption that we are seeing is unwelcome,’ said CEO Paul McDonald.
‘These issues will be resolved over the coming months, but as they are affecting both our customers and suppliers simultaneously the situation has significantly limited our operating agility in the short term.’
Babcock International (BAB) topped the FTSE 250 leaderboard. Registering a near 8% jump to 326.2p after the aerospace, defence and security group agreed to sell its Frazer-Nash Consultancy subsidiary to KBR for £293 million.
‘The sale forms part of Babcock’s targeted disposal programme, which aims to generate at least £400 million of proceeds in the next twelve months,’ said the company, adding that ‘proceeds from this transaction will be used to reduce net debt’.
Specialist retailer Pets at Home (PETS) rose 2% to 482p on a positive read-across from the premium-priced takeover offer for online pet products rival Zooplus.
OTHER RISERS AND FALLERS
Elsewhere, online weekly competitions organiser Best of the Best (BOTB:AIM) collapsed after warning on profits, blaming a softening of pandemic-related demand since the end of the lockdown on 12 April as well as the rising cost of acquiring new customers.
The stock crashed 46% to 820p.
While still substantially higher than the pre-Covid comparative, results delivered in 2020, profitability and earnings for the year to 30 April 2022 are now expected to be 57% lower than that reported for full year 2021, said the company.
The warning accompanied news that average weekly sales for the first 15 weeks of the new financial year were down 15% year-on-year.
Morses Club (MCL:AIM) was marked up 0.7% to 82p as the non-standard financial services play reported a continued strong performance in its Home Collected Credit division and an uptick in customer numbers in its digital division for short-term and long-term lending products in the five months to July.
Westminster (WSG:AIM) fell 4% to 5.23p as the managed services and tech-based security solutions group reported a year-on-year drop in first half sales and a lurch into loss as the pandemic resulted in further ‘right-shifting’ of certain expected contracts and revenues.
And consumer self-care products play Venture Life (VLG:AIM) slumped 30% to 69.9p as the company warned sales for the first half to July 2021 will be below the levels reported last year due to much lower sales of hand sanitising gel and disappointing sales to its Chinese partner for Dentyl.
