Both the blue chip FTSE 100 index and the FTSE 200 mid-cap index managed to hold onto their earlier gains at lunchtime, taking comfort from the latest employment data which showed the UK jobless rate had fallen to 4.2% from 4.3% with the claimant count falling by a better than expected 49,700.
Investors are focused ahead of key interest rate decisions due from central banks later this week, with the Bank of England set to update the market on Thursday.
At 12.30pm the FTSE 100 was trading 0.3% higher at 7,256 points and the FTSE 250 was 0.2% firmer at 22,685 points.
COMPANY NEWS
Miningstocks gave the market much of its momentum thanks to the continuing strength in metal prices, lifting BHP (BHP), Rio Tinto (RIO) and Antofagasta (ANTO).
Banks were also on the front foot after a positive result from the latest Bank of England stress tests. The UK’s central bank found that even if unemployment rose to 12% and house prices crashed by 33%, UK banks’ capital would still be above dangerous levels, even allowing for Omicron outbreak.
That news helped Lloyds (LLOY) post 1.5% gains while NatWest (NWG) and Barclays (BARC) rose around 1.6%.
British Aerospace Systems (BA) and QinetiQ Group (QQ) fell by 0.6% and 2.3% respectively in response to a JP Morgan research note downgrading both stocks from neutral to underweight.
MAJOR MOVERS ON THE MARKET
Pest control firm Rentokil Initial (RTO) took a major step to strengthen its pest control business with the acquisition of US peer Terminix in a $6.7 billion cash and shares deal.
The acquisition will make Rentokil the pest control leader in the US and rest of the world with a combined 2020 turnover of $5.7 billion or £4.3 billion and underlying profits of $1.2 billion.
‘This is a win-win-win for colleagues, customers and shareholders,’ said Rentokil’s chief executive Andy Ransom.
However, shares fell 8% to 574p as investors factored in the hefty dilution likely to follow from the issue of over 640 million new shares to Terminix shareholders.
Telecom operator BT (BT.A) was another big FTSE 100 loser, down 6% to 164p after hopes of an imminent bid from France’s Altice were dashed.
Altice owner Patrick Drahi was free to bid from last weekend, but at the same time as announcing an increased stake of 18% today he ruled out making an offer for BT unless a third party stepped in.
Topping the FTSE 100 leader board was robotic grocery and logistics group Ocado (OCDO). Shares in the business rose 10.4% to £17.57 after it won a US court case against Norwegian robot-maker AutoStore over patent infringements.
Meanwhile, the firm posted a 3.9% drop in fourth-quarter revenues at its retail joint venture with Marks & Spencer (MKS) as it faced a slight slowdown in order growth and capacity constraints in meeting demand.
Ocado said fourth-quarter trends reflected strong momentum in underlying demand, while forecasting its ‘best-ever Christmas ahead.’
Defence company Chemring (CHG) dropped 0.5% to 287.5p even as it reported a rise in annual profit, buoyed by stronger margins that had offset a 2% slip in revenue.
Chemring's underlying operating margin expanded to 14.6% from 13.6%, thanks to growth in the higher-margin sensors and information segment and continued cost cutting.
ELSEWHERE ON THE MARKET
Lifestyle brand Joules (JOUL:AIM) tumbled 22.5% to 151p after it warned on profits for both the first half and the full year, as supply-chain challenges overshadow a recovery in sales.
Joules was now expecting first-half pre-tax profit before adjusted items of £2 million to £2.5 million, down from £3.7 million year-on-year, with a full-year figure of £9 million to £12 million.
Builders' merchant Travis Perkins (TPK) added 1% to £15.105 after announcing that it had extended its initial £100 million share buy-back by a further £70 million.
Travis Perkins also said it would update shareholders about future capital returns at its annual results briefing on 1 March 2022.
Brake disc manufacturer Surface Transforms (SCE:AIM) skidded 4.5% lower to 50p having warned that its annual revenue would fall significantly short of expectations due to delays in the development of a production facility.
Revenue for the year through December was now expected to be below £3 million, the shortfall mainly due to delays in final commissioning of upscaled production capacity at Knowsley.
Oil company SDX Energy (SDX:AIM) slumped 7.8% to 7.6p after a drilling campaign in Morocco had been delayed due to operational issues and Covid-19 border restrictions.
The two-well campaign initially expected to finish at the end of December was not now expected to complete in the middle of the 2022 first quarter, SDX said.
FOR A LIST OF FTSE 100 RISERS AND FALLERS SEE HERE
