UK stocks lost some of their earlier momentum but closed higher on Monday as investors turned optimistic on progress over a proposed $1.9 trillion US stimulus package. A weaker pound and strength across European indexes supported UK markets, with commodity stocks leading the charge.
Miners rallied more than 2.5%, while engineering, tobacco and chemicals sectors also made firm gains.
At the close, the benchmark FTSE 100 had risen 0.5% to 6,523.53 points, led by Evraz’s (EVR) 4% gain to 523.6p. Anglo American (AAL), Antofagasta (ANTO) and BHP (BHP) also posted gains in excess of 2%, while firmer oil prices pushed BP (BP.) almost 4% up at 261.95p.
EXPERIAN RESPONDS TO DATA CLAIM
In corporate news, Experian (EXPN) nudged 1.5% lower to £25.97 as investors fretted over a potential data breach.
However, the credit reporting company insisted there is no evidence that its technology systems had been compromised following reports media reports concerning data illegally offered for sale on the internet in Brazil.
Online fast fashion retailer Boohoo (BOO:AIM) said it had acquired the online assets of Philip Green’s fashion empire, including customer data of the Burton, Dorothy Perkins and Wallis brands from Arcadia’s administrators for £25.2 million in cash.
But Boohoo stock slumped 5% to 347.5p after mounting speculation that Chancellor Rishi Sunak wants to impose a digital tax on online retailers to even up the tax gap between high street operators and their internet-only rivals. That saw shares in ASOS (ASC:AIM) and AO World (AO.) marked lower on Monday.
Power generator Drax (DRX) firmed 1% to 391.2p following news that it agreed to acquire biomass group Pinnacle Renewable Energy for around £226 million.
Drax said the deal would more than double its biomass production capacity, significantly reducing production costs.
Consumer goods brand owner UP Global Sourcing (UPGS) rallied 6% to 142.68p as yet another positive trading statement, with sales up 11.4% to £75.4 million for the six months to January 2021, triggered a fresh round of earnings upgrades.
The online and supermarket channels performed ‘particularly well’ in the first six months’, while laundry, floor care, heating and cooling brand Beldray once again proved the ‘standout performer’, said UP Global Sourcing.
Given the momentum in its order book, UP Global Sourcing now expects full year underlying pre-tax profits will be ‘in excess of £10.3 million’, prompting Shore Capital to upgrade its forecast by 5% to £10.4 million.
Industrial and electronics products maker Electrocomponents (ECM) reversed earlier modest losses to nudge 0.6% ahead to 943p despite reporting like-for-like revenue growth of 8% for the four months through January and keeping its annual outlook unchanged despite ongoing heightened freight, labour and logistical costs.
Electrocomponents left its full year profit expectations were unchanged with ‘stronger revenue growth offset by additional ongoing costs’.
SMALLCAP WRAP
Investing specialist Arrow Global (ARW) saw its stock jump 25% to 288p after TDC Capital tabled its fourth takeover offer, pitched at 305p per share.
The private equity firm had previously made offers to the Arrow Global board worth 250p, 265p and, last month, 290p per share. All were rejected but Arrow is thinking over the new bid and will make an announcement in due course.
Cloud platform group LoopUp (LOOP:AIM) closed nearly 4% to the good at 81p on confirming that it expected to report higher annual revenue and core earnings for 2020.
Disease test-kit supplier Omega Diagnostics (ODX:AIM) soared 33% to 92.8p after confirming it was upscaling its manufacturing capabilities, while acknowledging a media report that it had been selected by the UK government to produce Covid-19 rapid tests.
Molecular diagnostics group Yourgene Health (YGEN:AIM) slumped more than 6% to 12.4p after it warned that it would fall short of its previous revenue forecasts, citing the Covid-19 pandemic’s impact on ordering patterns.
Caribbean and Atlantic margin focused oil and gas company Bahamas Petroleum (BPC:AIM) collapsed after its much hyped Perseverance #1 well in the Bahamas came up largely dry.
The stock plunged 66% to 0.7p on the news that commercial volumes of oil have not been proven and that the company will plug and abandoned the well.
