The FTSE 100 gained 0.66% to 6,449 shortly after trading began on Monday as China injected fresh funds into its money market, while silver prices rose on expectations the precious metal is being targeted by newly empowered day traders.
The FTSE’s gain comes after a strong rally in Asian markets, with Japan’s Nikkei 225 up 1.55%, the Hang Seng in Hong Kong soaring 2.15% and China’s Shanghai Composite increasing 0.64%.
In commodities, the big story was silver as it jumped 7% to $28.99 an ounce as it was targeted by amateur traders, with some users in the Reddit forum Wallstreetbets arguing that silver is a manipulated market and that a surge in the silver price could hurt large Wall Street players.
Shares in silver miners soared, with FTSE 100 miners Fresnillo (FRES) up 15.6% to £11.41 and Polymetal International (POLY) gaining 6.3% to £16.81. In the FTSE 250, Hochschild Mining (HOC) jumped 16.2% to 267.2p.
In company news, JD Sports Fashion (JD.) gained 6% to 792p after it agreed a deal to acquire American sportswear brand DTLR Villa for $495 million.
‘The acquisition of DTLR will enhance our presence in the north and east of the United States and will be another important step in the group's evolution,’ JD Sports Fashion said.
Based in Baltimore, Maryland, and currently majority owned by BRS & Co. and Goode Capital, DTLR, established in 1982, is a hyperlocal athletic footwear and apparel streetwear retailer. The deal for DTLR is expected to be completed during the first quarter of the year.
Online fashion retailer ASOS (ASC:AIM) increased 2.6% to £45.92 as it acquired the Topshop, Topman, Miss Selfridge and HIIT brands from failed retail group Arcadia for £265 million.
The acquisition of the brands will help ‘accelerate our multi-brand platform strategy ... [and] under our ownership, we will develop them further,’ Asos said.
This year it expects any incremental earnings before interest, taxes, depreciation and amortisation (EBITDA) to be offset by initial investment and ramp up costs as it focuses on integration, engaging with retail partners and rebuilding stock to support its trading plans.
The company also expects to incur one-off restructuring and transaction costs of £20 million.
It said, ‘We anticipate incremental sales in FY22 to be broadly flat to FY20 acquired brand sales’ and added that it expects the transaction to deliver a ‘double-digit return on capital (post tax) in the first full year.'
Pharmaceutical giant AstraZeneca (AZN) edged 0.2% higher to £75.05 after it received approval from EU regulators for its Covid-19 vaccine.
It comes as the company agreed to supply the EU with an extra nine million doses of the vaccine by March, though the 40 million doses now expected is still half of what had been expected by the EU as tensions between the bloc and AstraZeneca continue.
Commercial real estate company Land Securities (LAND) rose 1.6% to 624.7p, even as it corrected its December-quarter office rent collection rate for the rest of Central London to 70%, from the previously stated 82%.
Networking solution company BATM Advanced Communications (BVC) gained 4.9% to 106.5p after it upgraded its outlook on revenue and earnings as stronger-than-expected demand for Covid-19 test kits toward the end of the year boosted performance.
For the full year 2020, revenue is expected to be at least $180 million, ‘significantly ahead’ of upgraded market expectations and representing annual growth of over 45% and, consequently, EBITDA is also set to be ‘substantially’ ahead of market expectations.
B2B information services provider Euromoney Institutional Investor (ERM) added 1.4% to 967p on news that it has acquired The Jacobsen, a price reporting agency, for $12.3 million.
The Jacobsen provides price assessments primarily in North American markets, including coverage of animal fats, feeds and vegetable oils.
SMALL CAP WRAP
Recruitment and training company Staffline (STAF) fell 0.3% to 56.4p after initially climbing 4% as it forecast an underlying operating profit ‘marginally ahead’ of market expectations.
Video game developer Sumo (SUMO:AIM) firmed 2% to 359p following news that it had acquired Poland’s PixelAnt Games for an initial £0.25 million, plus potential performance payments.
Out-of-hospital care group Totally (TLY:AIM) added 1.6% to 32.5p after its Vocare unit won two 12-month contract extensions worth about £16.8 million combined.
Self-care consumer goods group Venture Life (VLG:AIM) gained 2.3% to 90p after guiding for annual adjusted earnings to more than double amid a jump in sales.