UK stocks rallied on Wednesday despite US stocks falling overnight after Federal Reserve chair Jerome Powell suggested inflation was no longer transitory and hinted that tapering of financial stimulus would have to go ahead no matter the impact of the Omicron variant of Covid-19.
Travel and leisure stocks International Consolidated Airlines (IAG) and Whitbread (WTB) were the top performers, while energy stocks BP (BP.) and Royal Dutch Shell (RDSB) were also well bid as oil prices rebounded.
At midday the FTSE 100 index was 90 points or 1.3% higher at 7,150 points, while the FTSE 250 mid-cap index was also up 1.3% to 22,816 points.
Brent crude futures rallied 3% to $72.40 while sterling gained 0.3% to $1,3330 against the dollar.
COMPANY NEWS
Insurer Aviva (AV.) advanced 3% to 397p after selling its Italian Life Insurance businesses to CNP Assurances for £462 million, a sale which concludes the FTSE 100 company’s exit from the Italian market.
Van hire company Redde Northgate (REDD) accelerated 7% to 422.5p on strong first half results showing a near-doubling of underlying pre-tax profit to £78.9 million.
The company’s services have seen a surge in demand during the pandemic as its vans were desperately needed amid a surge in online shopping, while its claims and accident management business benefitted from a resurgence in road travel which led to a higher number of incidents.
Online betting and gaming giant 888 (888) improved 1.3% to 314.2p after it announced that it has been awarded a provisional sports betting licence from the Virginia Lottery.
DRAX IN DEMAND
North Yorkshire-based Drax (DRX), the UK’s largest single source renewable energy company, sparked up 9.3% to 601p on news it expects 2021 adjusted EBITDA to come in around the top end of analyst expectations, subject to ‘good operational performance during December, including baseload running of all four biomass units’.
The FTSE 250 company also continues to expect net debt to Adjusted EBITDA to return to around 2 times by the end of 2022.
IG Group (IGG) added 0.5% to 775p after the financial trading platform said it would sell North American Derivatives Exchange and Small Exchange to Foris DAX Markets for $216 million.
‘We’re really excited by this deal, as it delivers a significant return on the previous investments made in Nadex and Small Exchange and enables additional investment across all our businesses’, said IG’s CEO June Felix.
She added that the deal also allows IG to ‘further sharpen our focus on integrating and expanding the US options and futures business through our tastytrade and tastyworks franchises, both in the US and internationally, where we see significant room for growth.’
AROUND THE MARKET
Elsewhere, car retailer Pendragon (PDG) motored 6.5% higher to 19.8p after once again raising underlying pre-tax profit guidance for 2021 from £70 million to around £80 million following a strong performance in the fourth quarter to date.
Whilst the shortfall in the supply of new vehicles persists, Pendragon said ‘customer demand and order levels have continued at a higher level than last year’ and stressed it continues to see a ‘robust performance in used vehicles’.
Construction materials play Brickability (BRCK:AIM) edged 1% higher to 106.5p on news of a surge in first half profit as revenue nearly trebled thanks to a boost from acquisitions.
Looking ahead, the company said it remained confident of ‘delivering performance at least in line with market expectations for the full year’.
Peel Hunt (PEEL:AIM) softened 0.2% to 210p after the broker reported a slump in first half profit, pinned on the costs of its recent initial public offering and a slump in revenue as trading activity normalised from levels seen during the pandemic.
However, Peel Hunt insisted it continues to grow its number of retained investment banking clients and has ‘a healthy deal pipeline with a strong balance of transactions’.
The broker also stressed it is ‘well positioned to execute our growth plans, which include opening a European office to support our growing distribution franchise across the continent. We remain on track to deliver on our budget for the year.’
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