UK stocks gain strongly in early trade on Tuesday, supported by better-than-anticipated export trade data from China, and a smattering of buyouts across the corporate landscape. China’s August exports declined 5.5% in August from a year earlier after a 8.3% drop in July, according to the General Administration of Customs, but that's a fair bit better than the 6.6% decline that was expected by analysts.
The FTSE 100 index rallies 80-odd points, or 1.3%, early on Tuesday to 6,155, continuing the robust start to the week on Monday, with midcaps also in demand, the FTSE 250 adding 174 points, or about 1%, at 17,017.
On the company front, buyouts, both real and rumoured, lift several big company stocks, with water group United Utilities (UU.) heading the Footsie leader board amid reports that it could attract takeover interest due to its current valuation. Analysts at Bernstein upgrade the stock to outperform, saying it is 'an attractive acquisition target for a pension or infrastructure fund.' The shares ride around 3% higher to 876p.
A deal seemingly done and dusted, Betfair (BET) nudges higher after the company and its rival Paddy Power (PAP) finally agree a previously mooted £5 billion merger.
The buyouts keep coming with insurance underwriter Amlin (AML) surging after MS&AD Insurance Group said it was in talks to buy the group in a £3.5 billion deal. Amlin stock soars nearly 33% to 654p, valuing the business at £3.3 billion.
Among the bigger movers, a slower than hoped-for recovery in Asian markets put science kit and tools maker Oxford Instruments (OXIG) on the back foot, the shares diving 18% to 659.5p.
A slump in gross margins at IT testing business SQS (SQS:AIM) sparks a second half profits warning despite otherwise robust interim figures. Investors are clearly concerned and the shares are 16% off at 480p in early trade.
Geo-location minnow Starcom (STAR:AIM) jumps 13% to 4.25p as it confirms a new contact with a major international organisation for its Helios Hybrid tracking system, following an international tender against a number of competitors.
Bargain Booze-to-Wine Rack owner Conviviality Retail (CVR:AIM) surges 22.6% higher to 190p as trading is restored following M&A-related AIM suspension. Conviviality has agreed to acquire drinks wholesaler Matthew Clark for £200 million, a reverse takeover funded with the help of a £130 million placing. For more on the Conviviality story, read our recent Griller interview with CEO Diana Hunter.
Franchised motor retailer Cambria Automobiles (CAMB:AIM), a running Shares Play of the Week, accelerates 7.25% higher to 74p. Another round of earnings upgrades ensues as Cambria flags strong second half growth and says full-year results will beat already-upgraded expectations.
Respiratory disease-focused drug-developer Verona Pharma (VRP:AIM) dives 10.5% to 4.4p after pre-tax losses widen 238% to £4.4 million in the six months to 30 June on higher R&D costs than a year earlier.
High-end housebuilder Berkeley (BKG) adds 2.1% to £34.48 after the £4.7 billion cap after group chairman Tony Pidgley said the company was on track to deliver an earnings target of £2 billion over the next three years.
Elsewhere in the housebuilding space, Redrow (RDW) celebrates another record year with shares advancing 2.7% to 495p on the back of a 33% rise in revenue to £1.15 billion while operating profit rose 54% to £213 million in the year to the end of June.
Laser precision construction equipment manufacturer Somero (SOM) sees shares rising 1.7% to 140.9p after the group's half year results show a 20% increase in revenue to $35 million in the six months to the end of June. Pre-tax profit in the period was up 28% to US$ 8.2 million, driven by particularly strong activity levels in North America and the Middle East.
