London midday: FTSE hits fresh high as GKN surges on Melrose offer
London stocks had edged a little further into the green by midday on Friday, with the top-flight index hitting a record intraday high as engineering group GKN surged after rejecting an offer from Melrose in favour of carrying out a restructure.
The FTSE 100 was up 0.2% to 7,777.54, having hit a record intraday high of 7,782.89 earlier, above Thursday's closing record of 7,762.94. Meanwhile, the pound was up 0.7% versus the greenback at 1.3633 and down 0.1% against the euro at 1.1244.
There are no major UK macroeconomic data releases due, but in the US investors will eye the release of retail sales and inflation data for December at 1330 GMT. Market participants will also turn their attention to the US corporate calendar as earnings season kicks off in usual style with big banks JPMorgan Chase, BlackRock and Wells Fargo all reporting.
"Recent market highs have been based on expectations of higher global growth and increased corporate earnings, so the start of the US earnings season today is a major market event," said analyst Rebecca O’Keeffe at Interactive Investor. "Investors will be hoping that both top line growth and high margins can lead to substantial earnings growth and justify current equity valuations."
On the UK corporate front, the share up-swell was led by GKN, which surged nearly 27% after the company said it has rejected a bid proposal from Melrose Industries and appointed Anne Stevens as chief executive, as it announced plans to separate its aerospace and automotive businesses. Melrose shares were up 5%.
Inhaler maker Vectura was in the black following press reports that GlaxoSmithKline is looking to make a bid for the company.
Smiths Group was on the front foot as it said the net impact of the new US tax legislation on the group would be “favourable over the medium term”.
Bovis Homes edged up after saying it built a lower number of homes in 2017 but reporting much improvement in its balance sheet and in customer satisfaction after the controversy that saw its previous chief executive depart under a cloud last summer.
Discount retailer B&M European Value racked up healthy gains as it reported a strong quarter of growth in the pre-Christmas period, helped by 22 new store openings and keeping prices low in the UK and Germany.
Restaurant and pub chain owner Mitchells & Butlers was in the black after saying that trading through the core three week festive season was “strong”, with LFL sales growth of 3.9%.
In broker note action, Mondi and Superdry were boosted by upgrades from Investec and Stifel, respectively, while SSP was higher after an upgrade at JPMorgan.
Rotork benefited from an upgrade at HSBC, but TUI was hit by a downgrade to 'neutral' at JPMorgan.
FTSE 100 - Risers
GKN (GKN) 421.70p 26.75%
Smiths Group (SMIN) 1,641.00p 4.69%
Smurfit Kappa Group (SKG) 2,548.00p 2.08%
GlaxoSmithKline (GSK) 1,357.60p 2.03%
Marks & Spencer Group (MKS) 306.90p 1.89%
Burberry Group (BRBY) 1,811.50p 1.80%
Mediclinic International (MDC) 612.80p 1.73%
Rolls-Royce Holdings (RR.) 861.40p 1.68%
Ashtead Group (AHT) 2,105.00p 1.54%
BT Group (BT.A) 274.80p 1.46%
FTSE 100 - Fallers
Just Eat (JE.) 792.98p -1.35%
Severn Trent (SVT) 2,010.00p -1.28%
British American Tobacco (BATS) 4,990.50p -1.18%
Unilever (ULVR) 3,972.00p -0.91%
Direct Line Insurance Group (DLG) 373.50p -0.74%
DCC (DCC) 7,715.00p -0.52%
Barclays (BARC) 195.10p -0.51%
HSBC Holdings (HSBA) 792.20p -0.48%
United Utilities Group (UU.) 764.40p -0.47%
Reckitt Benckiser Group (RB.) 6,770.00p -0.44%
FTSE 250 - Risers
Melrose Industries (MRO) 226.10p 5.16%
Pets at Home Group (PETS) 174.98p 3.97%
SSP Group (SSPG) 652.45p 3.73%
Petrofac Ltd. (PFC) 541.25p 3.33%
B&M European Value Retail S.A. (DI) (BME) 409.75p 3.24%
Cobham (COB) 130.85p 3.03%
IMI (IMI) 1,437.00p 3.01%
Vectura Group (VEC) 117.30p 2.99%
Aggreko (AGK) 819.60p 2.91%
Rotork (ROR) 299.90p 2.85%
FTSE 250 - Fallers
Card Factory (CARD) 217.00p -3.90%
Ferrexpo (FXPO) 304.20p -3.37%
Sirius Minerals (SXX) 23.12p -3.26%
GVC Holdings (GVC) 934.00p -2.20%
Man Group (EMG) 210.40p -1.91%
St. Modwen Properties (SMP) 392.20p -1.80%
Ladbrokes Coral Group (LCL) 182.75p -1.80%
Daejan Holdings (DJAN) 5,882.60p -1.79%
Playtech (PTEC) 806.40p -1.78%
Softcat (SCT) 520.95p -1.71%