Stocks across Europe generally lacked direction in the absence of American equity market participation due to the Thanksgiving holiday, but strong UK retail sales data lent support to the equity market.

The CBI (Confederation of British Industry) monthly retail sales balance increased to a three month high of +39 from +30 and is expected to rise again in December, driven in part by consumers starting their Christmas shopping earlier due to fears over a potential shortage of products linked to supply chain issues.

Both the blue-chip FTSE100 Index and the mid-cap FTSE 250 Index finished Thursday’s trading session in positive territory, the  former rising 0.3% to 7310 points and the latter firming 0.5%  to  23,280 points.

MAJOR MOVERS

Having rallied more than 5% in early trading , bar and restaurant group Mitchells & Butlers (MAB) closed up 3.5% at 244p as investors digested like-for-like sales in recent months which exceeded pre-pandemic levels.

However, the firm warned that rising costs, supply chain issues and labour shortages since Brexit would ‘inevitably’ have an impact on its performance in the current year.

Big movers among the mid-caps were Hochschild Mining (HOC), which topped the FTSE 250 leaderboard, and Vivo Energy (VVO).

Hochschild rallied 14% to 139p after more dovish comments from the Peruvian authorities. The company’s confirmed its flagship Inmaculada mine and another in the Ayacucho region of Peru would be allowed to operate under current frameworks, a day after the South American country encouraged miners to seek extensions.

Last week, Peru planned to rule out timeline extensions for mines in Ayacucho on environmental concerns and said they would instead close down in the near future.

Vivo Energy surged 18.4% to 132p after news that commodities trader Vitol would buy the company in a deal valued at roughly $2.3 billion.

Vitol, already the owner of a 36% stake in Vivo, offered shareholders $1.79 in cash for each share they hold, and $0.06 as an interim plus special dividend.

Global drinks seller Diageo (DGE) rose nearly 1% to £39.12 after peer Remy Cointreau raised its full-year profit outlook thanks to a doubling of first-half operating profit driven by strong demand for its premium cognac in China, the US and Europe.

MORE MOVERS

Logistics group DX (DX.:AIM) plunged 26.6% to 22p after delaying the release of its annual report due to a corporate governance inquiry relating to an internal investigation  which started during the financial year ended 3 July 2021.

‘The inquiry has yet to be concluded, and the process will delay the completion of the audit, but will be expedited as quickly as possible,’ the company said.

If the annual report isn't finalised by the start of January, under AIM rules DX shares would be suspended.

Infrastructure group Hill & Smith (HILS) reported a rise in revenues in the four months October as price increases helped offset rising costs amid supply chain headwinds.

Trading during the period was robust with revenues 4% ahead of last year on an organic constant currency basis, but investors took fright, sending the stock down 8.5% to £17.06.

The company said its operating companies implemented price increases to help ‘offset input cost inflation, with steel being the most impacted category for the group’.

Energy services provider Good Energy (GOOD:AIM) said it would sell its 47.5MW renewable asset portfolio as part of an ongoing strategic shift, sending its shares 1.7% lower to 280p.

Proceeds from the transaction would be used to accelerate and support ‘previously identified strategic growth opportunities,’ the company said.

Software and services company Gresham Technologies (GHT) upgraded its earnings outlook following ‘strong’ trading and said it had won a contract extension from an unnamed bank.

The shares rose 3.5% to 176.5p after the company said it expected full-year group revenues and EBITDA to exceed current market expectations.

UPGRADES AND DOWNGRADES

Outsourcing group Capita (CPIsurged 9.6% to 48.79p in response to an RBC note upgrading the stock to outperform, while engineering firm Renishaw (RSWfell 4.8% to £47.54 after a downgrade from Morgan Stanley.

 

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Issue Date: 25 Nov 2021