London’s leading shares continued their strong start to the New Year at lunchtime, showing little reaction to this morning’s UK manufacturing purchasing managers’ index, which was little changed from November’s reading.
The seasonally adjusted IHS Markit/CIPS PMI was 57.9 in December, little changed from November’s three-month high of 58.1. A value above 50 indicates expansion and the PMI has now remained above the crossover point for 19 months in a row.
The benchmark FTSE 100 traded 1.3% higher at 12.30pm, hitting highs of 7,485.06, levels not seen since before the pandemic. Reopening trades were popular, with BA-owner International Consolidated Airlines’ (IAG) 12% jump to 159.32p topping the FTSE leader board.
Mid-caps were also strong, adding nearly 2% to 23,929.71.
There were widespread gains for oil companies, travel stocks and hotels, pub and restaurant plays, reflecting diminishing concerns over the latest Covid variant amid hopes it is milder, if more transmissible, and therefore may have a limited impact on the economy and won’t require long-lasting restrictions.
Energy giants BP (BP.) and Royal Dutch Shell (RDSB) were in demand, as was Premier Inn parent Whitbread (WTB).
Among second-liners, consumer-facing names including holidays company TUI (TUI), cruise operator Carnival and low-cost carrier EasyJet (EZJ) caught a bid.
CORPORATE NEWS
Shares in Rolls-Royce (RR.) were also boosted by the news it has completed the sale of its Bergen Engines business to Langley Holdings for an enterprise value of €63 million.
Rolls-Royce said sale proceeds of €91 million, together with €16 million of cash held within Bergen Engines which has been retained, will be used to help rebuild the balance sheet.
The shares rose 3.6% to 127.35p.
In the FTSE 250, Capita (CPI) was marked up more than 2% to 37.32p after the support services provider completed the sale of its secure solutions and services business to NEC Software Solutions UK for £62 million.
Budget carrier Wizz Air (WIZZ) rallied 13% to £47.25 on news that passenger numbers increased in December amid an ongoing recovery in the travel sector.
Passenger numbers in December rose 296.3% to about 2.6 million from a year earlier and the low-cost airline’s load factor rose 19.3% percentage points to 75.4%.
Building materials distributor Grafton (GFTU) gained 1.7% to £12.5 as it flagged the completion of the sale of its traditional merchanting business in the UK on New Year’s Eve.
AROUND THE MARKET
Elsewhere, SigmaRoc (SRC:AIM) skipped 5.2% higher to 87.8p after the quarried material company announced the acquisition of profitable Johnston Quarry for an initial £35.5 million in cash.
SigmaRoc CEO Max Vermorken said Johnston Quarry is ‘a high quality quarrying group, with an attractive geographic footprint and a product range which offers both architectural and environmental benefits over alternatives. The acquisition extends our footprint significantly in several key markets within the UK, while offering the opportunity for further improvement and platform based synergies.’
Restaurants owner and operator Tasty (TAST:AIM) ticked up 2.4% to 5.25p despite reporting a considerably weaker than anticipated performance in December as pandemic-related government restrictions reduced customers eating out and deterred larger Christmas bookings.
However, investors were relieved as the casual dining sector player confirmed that its restaurants have so far remained open with only isolated Covid-19 related disruptions to date.
2022 ‘will not be without its challenges’ conceded Tasty, as the company prepares for the end of government support, though it is ‘confident in its brands and optimistic about the trading potential of the group, especially with the strong revenue stream provided by takeaway and delivery services’.
Biotherapeutics company 4D Pharma (DDDD:AIM) dipped 2.8% to 52.1p despite appointing John Doyle as finance director. Doyle joins 4D pharma after serving as finance director at Chiasma, a publicly traded biopharmaceutical company acquired by Amryt Pharma in 2021.
And geospatial productivity and collaboration software company IQGeo (IQG:AIM) climbed 1.6% to 131p after winning a five-year contract from an unnamed US telecom network operator.
