Market report: Revived appetite for risk injects a spark

Louis Ashworth
·2-min read
G4S
G4S

Global shares rose strongly as investors kicked off December with a risk-on attitude that sent the FTSE 100 up nearly 2pc, or 118.5 points to 6,384.7.

Britain’s blue-chip index was the Continent’s top major performer, despite a simultaneous rise from the pound – which broke above $1.34 for the first time since early September.

The FTSE 250 performed even better, jumping 2.6pc, or 508.5 points to 19,844.8, with only a handful of mid-caps failing to grab gains.

Security firm G4S rose 8p to 229p, after Bloomberg reported that Canadian counterpart GardaWorld was planning to increase its all-cash bid of 190p-per-share before today’s deadline.

It did not confirm a price, though some top G4S shareholders have been pushing for the suitors to raise bids to at least 220p-per-share prior to more serious negotiations.

A series of favourable comments by analysts injected some spark into London’s equity markets.

Lloyds Banking Group led a broad rise for blue-chip lenders, climbing 2.7p to 38.3p in a move spurred by a Citi note that said UK and Nordic banks should lead on capital returns in the next couple of years.

On the FTSE 250, Virgin Money jumped 15.3p to 141.8p after announcing on Monday that seven of its top bosses had collectively bought about £195,000 of shares.

Britain’s domestic stocks were buoyed by a favourable Goldman Sachs note, which said the UK is “a buy” as the Brexit deadline approaches.

The Wall Street bank’s analysts, led by Sharon Bell, said a “thin” trade deal should support the pound, while long-neglected UK-focused stocks could finally catch a break, continuing a steady recovery since early October.

“The outperformance of UK domestic so far is small, and we would expect a further bounce relative to European shares assuming a trade agreement,” Ms Bell wrote.

Notable individual moves were limited by a quiet week for company reporting, although the broad shifts that marked much of last month – including a rotation away from lockdown’s winners – could be seen across London’s main market, with groups such as Ocado, Paddy Power-owner Flutter, Domino’s Pizza and Games Workshop losing out.

Britvic shares fell 3p to 816.5p following a Deutsche Bank note, which kept the soft-drinks maker at a “buy” rating, but said better investment opportunities lay among spirits.

Diageo, which analyst Gerry Gallagher upgraded to a “buy” rating, rose 46.5p to £29.27.

Precious metal miners gained as gold prices caught a moderate rise. Fresnillo led the way up 35.8p to 655.8p, with blue-chip peer Polymetal not far behind, adding 73.5p to £16.36.

Mid-cap Hochschild Mining rose 17.2p to 229.8p while Petropavlovsk gained 2.0p to 29.4p.