UK utility services stocks dominate the list of FTSE 100 risers in early afternoon trading on Wednesday. Water suppliers United Utilities (UU.) and Severn Trent (SVT) would be topping the Footsie leader board were it not for the shock swoop for pharmaceuticals company Shire (SHP).
The pair have seen their respective share prices jump 4.6% and 3.3% today, big moves for these predictable if dull businesses.
SHIRE DOMINATES
Shire is the subject of takeover talks, a possible target of Japanese drugs giant Takeda, although few real details have been made public so far. That’s not stopped its stock soaring 18% to £36.03.
Below the water supplier pair National Grid (NG.) is also popular with investors, its share price close on 2.9% higher at 785.4p.
FTSE 250 water firm Pennon (PNN) is today’s biggest mid-cap riser, up 4% to 616.8p, valuing the business at just shy of £2.5bn.
British Gas-owner Centrica (CNA) may be barely more than 1% up on Wednesday yet its stock has rallied more than 5% in a week.
CORPORATE ACTION DRAGS
Investors are clearly looking to de-risk in light of recent stock market turbulence that had plunged the FTSE 100 index below the 7,000 mark for the first time in 15 months.
The market mood has not been helped by a series of takeovers, restructures and spin-offs, as we explained last week.
But investors should probably keep the utilities optimism on hold. The sector heavyweights remain off around 30% or so on average over the past year and there remain plenty of hurdles, both political and operational, to hamstring firm progress for now.
