UK stocks rallied in early trading on what commentators called ‘turnaround Tuesday’ following back-to back losses for markets on Friday and Monday, helped by positive US earnings reports overnight.
Chip maker Micron reported strong first quarter results due to robust demand from new product areas like data centres, electric vehicles and factory automation, while footwear giant Nike posted second quarter earnings 30% ahead of forecasts thanks to strong US and European sales and raised its full year margin guidance.
The results helped lift sentiment with Asian markets trading sharply better and US futures pointing to a strong opening later today.
At 8.30am the FTSE 100 index was up 67 points or 0.9% to 7,265 points with every sector making gains. Miners rebounded the most from Monday’s drubbing, while house builders and clothing retailers also made a good start.
PHARMACEUTICAL NEWS
There was further positive product news from drug makers with AstraZeneca (AZN) reporting its autoimmune treatment Ultomiris had been accepted for priority review by the US FDA (Food & Drug Administration) in the second quarter of next year. Shares gained 0.7% to £85.50.
Rival GlaxoSmithKline (GSK) announced its Apretude long-acting anti-HIV treatment, produced by its majority-owned specialist subsidiary ViiV Healthcare, had been approved by the FDA, lifting its shares 0.2% to £15.95.
FINANCIAL M&A
Consolidation in the asset management sector continued with confirmation from FTSE 100 firm Schroders (SDR) it had agreed to buy 75% of the shares of specialist renewable infrastructure investor Greencoat Capital for £358 million.
The deal brings in £6.7 billion in assets under management and forms part of Schroders’ ambition to be ‘a global leader in this fast-growing and important sector’. Schroders traded 1.1% better at £34.12.
Meanwhile, smaller manager River & Mercantile (RIV) said it had extended the deadline for rival bidders Assetco and Premier Miton Group (PMI) to make an offer for the firm to 18 January, with the usual caveat there was no guarantee an offer would be made. Shares ticked up 0.6% to 303.8p.
SMALLER CO ROUND-UP
Specialist staffing firm Empresaria (EMR:AIM) reported trading had been strong through the final quarter of the year and pre-tax profits would therefore be ‘materially’ ahead of forecasts, sending the shares up 9% to 75p.
Life sciences software provider Instem (INS:AIM) said it had won new business from existing and new customers in China, meaning ‘increasing earnings visibility’ and higher margins. Shares edged up 1.2% to 820p.
After jumping more than 9% yesterday on an increase in the earnings outlook, shares in video games service provider Keywords Studios (KWS:AIM) added a further 1.4% to £27.92 on the news it had made two small bolt-on acquisitions, in the UK and Australia, for £9.8 million and $6.5 million respectively.
