London’s FTSE 100 enjoyed a positive start to the week as investors clung onto a usually ignored piece of data out of China in the search for optimism, while HSBC (HSBA) and Diageo (DGE) rallies also helped the index.
For the fourth straight month Chinese industrial profits were on the rise, surging 19.1% in August year-on-year having been buoyed by a rise in commodities prices and equipment manufacturing. It means for January to August profits were only down 4.4%, stoking economic recovery hopes.
At 12.25, the blue chip benchmark was 1.32% higher at 5,919.84, while the FTSE 250 was trading 1.84% higher at 17,356.97.
Unloved banking behemoth HSBC rose 8.8% to 308p on the news its largest shareholder, China’s Ping An Asset Management, has raised its holding in the lender from 7.95% to 8%, a vote of confidence that translated into a substantial rally for the shares both in Hong Kong and London.
Spirits giant Diageo fizzed up 7.4% to £27.07 on news the Johnnie Walker-to-Smirnoff maker’s outlook for the first half of fiscal 2021 has improved since the year-end, reflecting a ‘good start to the year, particularly for our US business’.
Diageo continues to expect ‘sequential improvement in organic net sales and operating profit’ compared to the second half of fiscal 2020, although the drinks giant still expects lower organic sales and margin dilution compared to the first half of 2020.
Gambling group William Hill (WMH) slumped 10.2% to 280p, paring Friday’s large gains, after casino giant Caesars Entertainment revealed it had pegged its takeover offer for the company at £2.9 billion.
Caesars said William Hill’s directors had indicated the 272p per share bid was ‘at a price level that they would be minded to recommend’. William Hill shares soared on Friday when it announced it had received separate takeover approaches from Caesars and private equity group Apollo.
Daily Mirror and Daily Express publisher Reach (RCH) rallied 18.55% to 76.4p, despite booking a 57% drop in first-half profit as the pandemic hit sales already under pressure.
Investors welcomed the news Reach is currently performing ‘materially ahead’ of market expectations for the full year thanks to a strong recovery in third quarter digital advertising.
Eddie Stobart Logistics (ESL:AIM) lost 4.5% to trade at 7.4p after the logistics play reported wider first-half losses as exceptional costs weighed.
Stockbroker Numis (NUM:AIM) nudged up 0.68% to 295p after guiding towards a ‘materially higher’ profit for the year to September amid a jump in revenue.
Insurer Chesnara (CSN) ticked up 0.8% to 271.25p after raising its interim dividend despite swinging to a pre-tax loss in the first half of the year owing to an impairment charge and losses resulting from the impact of the pandemic.
Pharmaceutical services company Open Orphan (ORPH:AIM) advanced 11.38% to 19.07p after it won a £4.3 million contract to conduct a human viral challenge study for an unnamed global vaccine company.
Beauty brands business Brand Architekts (BAR:AIM) gained 0.93% to 121.11p despite the company reporting a fall in full-year sales and profits caused by the impact of the Covid-19 pandemic.
