Monday’s trading session ended on a positive note with both the benchmark FTSE 100 and the FTSE 250 finishing in positive territory. The former closed 0.8% firmer at 7925.25, and the latter edged ahead by 0.6% to 23,242.98. This was despite the release of mixed data.
On the one hand, diesel prices have reached a record high at the pumps. A litre of diesel is currently 30p more expensive than it was at the beginning of the year. This is clearly a potential headwind for markets as rising fuel costs reduce the amount of money consumers have to spend, and fuels inflationary pressures.
On a more positive note, the UK IHS Markit purchasing managers’ index increased to 57.8 from 57.1 in September. This marks the first rise in the index for the last five months.
The UK market was supported by a positive performance from American equity markets. All the indices were trading higher at the London close, partly in response to the American October manufacturing ISM PMI reading of 60.8 that indicated expansion in the economy for the 17th successive month.
MARKET NEWS
The morning’s biggest talking point was Barclays (BARC), where the departure of the bank’s chief executive Jes Staley was announced following an investigation by the City watchdog over his links to Jeffrey Epstein. Staley has said he will contest the preliminary findings of the inquiry carried out by the Financial Conduct Authority and the Prudential Regulation Authority. Shares drifted by 1.4% to 200p.
BT (BT.A), a favourite of rank-and-file private investors, led the blue-chip rally with a 4.4% gain to 145p on reports that boss Philip Jansen is set to announce that the company’s £1 billion cost savings target will be met a year earlier than previously guided.
But investors are perhaps more intrigued by the possibility of a takeover of the UK telco by French billionaire Patrick Drahi, founder of broadband challenger Altice. Under City rules, Drahi cannot bid until December because he built a 12% earlier this year though he stated there were no takeover plans.
An upgrade to ‘outperform’ by France’s BNP Paribas lifted shares in Lloyds (LLOY) by 1.75% to 51.1p.
DOUBTS CAST OVER DARKTRACE VALUATION
On the downside, cyber security firm Darktrace (DARK) continues to feel the heat following a last week’s research note from Peel Hunt that poured water on its currently lofty valuation. The analyst highlighted that Darktrace has low customer review scores compared to its main peers among other criticisms, putting a 473p target price on the stock.
Darktrace shares fell 15% on Monday, totting up losses over recent days from 945.5p to 681p.
Property regeneration company U&I (UAI) soared more than 70% in after agreeing to be taken over by commercial landlord Land Securities (LAND) in a £190 million deal.
U&I stormed 63p higher to 148P, while Land Securities fell 0.3% to 686p.
Howden Joinery (HWDN) gained 0.3% to 923p after saying it expects annual profits to be at the top end of current analyst forecasts of between £298 million and £360 million as the surge in DIY demand continued into the second half.
