Will Santa bring a fes­tive boost?

Daily Mail - - City & Finance - Hugo Dun­can

WILL there be a Santa Rally this year? That is the ques­tion on the lips of many in­vestors fol­low­ing a tur­bu­lent 11 months on the stock mar­ket in Lon­don.

Re­search from sav­ings and in­vest­ment firm Har­g­reaves Lans­down sug­gests those hop­ing for a strong end to the year could be in luck. De­cem­ber is tra­di­tion­ally the best month for the UK stock mar­ket – mak­ing a pos­i­tive re­turn 86pc of the time since 1985 and an av­er­age re­turn of 2.6pc.

The next best month is April – sug­gest­ing Easter Ral­lies are also com­mon – with the mar­ket ris­ing 77pc of the time with an av­er­age re­turn of 2.3pc.

‘Stock mar­ket his­tory sug­gests Santa re­ally does de­liver gifts to in­vestors in De­cem­ber with sur­pris­ing reg­u­lar­ity,’ said Laith Kha­laf, se­nior an­a­lyst at Har­g­reaves Lans­down.

‘Look­ing back over the past 30 years, De­cem­ber has been the best month for UK shares, which have risen al­most nine times out of ev­ery ten years.

‘In­vestors should cer­tainly not be in­vest­ing for just one month, but for those who are cur­rently think­ing of in­vest­ing in the stock mar­ket, his­tory in­di­cates they stand a good chance of get­ting off to a good start.’

But he added that this sce­nario was far from guar­an­teed.

‘No one can re­ally ex­plain this sea­sonal phe­nom­e­non, so don’t be too sur­prised if it turns out to be one of those years when Santa stays in his grotto.’

There was lit­tle sign of fes­tive cheer in trad­ing rooms yes­ter­day as the FTSE 100 in­dex drifted 19.06 points lower to 6356.09, although the FTSE 250 was up 155.60 at 17,420.70.

Euro­pean mar­kets fared far bet­ter as in­vestors on the Con­ti­nent bet that the Euro­pean Cen­tral Bank will de­liver a new dose of stim­u­lus to the ail­ing eu­ro­zone econ­omy on Thurs­day. The Dax was up 0.78pc in Frank- furt and the Cac rose 0.56pc in Paris while the main bench­mark in Mi­lan gained 0.63pc and Madrid was up 0.74pc.

Among the blue-chip ris­ers in Lon­don was In­terCon­ti­nen­tal Hotels Group (IHG), the hotels gi­ant be­hind the Hol­i­day Inn chain.

It is thought the com­pany is be­ing pur­sued by three Chi­nese suit­ors – Shang­hai Jin Jiang In­ter­na­tional Hotels Group, the air­lines owner HNA Group and the sov­er­eign wealth fund China In­vest­ment Corp.

The Chi­nese trio were in­ter­ested in buy­ing Star­wood, which owns the Sher­a­ton chain, be­fore ri­val Mar­riott swooped last month with an £8bn takeover bid.

They are now ex­pected to turn their at­ten­tion to IHG, which also owns the Crowne Plaza and In­terCon­ti­nen­tal brands and runs more than 4,900 hotels with al­most 730,000 rooms. Shares in IHG rose 67p to 2556p to value it at around £5.8bn.

Glen­core was also in favour, although the rise of 4.83p to 96.71p will only be of small con­so­la­tion to share­hold­ers who have seen the stock crash from a 2011 float price of 530p. The sell- off has been par­tic­u­larly ag­gres­sive, with shares down 69pc since their 2015 high of 313.3p in late April.

Build­ing stocks con­tin­ued their march higher in the wake of last week’s Au­tumn State­ment when the Chan­cel­lor an­nounced plans to kick-start the ‘big­gest house­build­ing pro­gramme since the 1970s’.

The house-build­ing sec­tor has been one of the big­gest win­ners since the Gen­eral Elec­tion as low in­ter­est rates, ris­ing wages and Govern­ment schemes to help buy­ers on to the hous­ing lad­der boost de­mand at a time of short sup­ply. In the FTSE 100, Bar­ratt De­vel­op­ments was up another 13.5p to 601p yes­ter­day, while Tay­lor Wim­pey gained 5.9p to 194.6p, Berke­ley rose 76p to 3211p and Per­sim­mon rose 38p to 1915p. Smaller ri­vals were also on the rise, with Bell­way up 72p to 2616p, Bo­vis Homes climb­ing 29p to 952.5p and Redrow lift­ing 17.2p to 454.2p.

An­a­lysts at Beren­berg down­graded TalkTalk to ‘sell’ from ‘hold’ and slashed its tar­get price from 290p a share to 208p in the wake of Oc­to­ber’s cy­ber- at­tack which re­sulted in the theft of data con­cern­ing some of the phone and broad­band provider’s four mil­lion cus­tomers.

‘We be­lieve TalkTalk’s plan to im­prove mar­gins sig­nif­i­cantly faces tough chal­lenges, made more dif­fi­cult by the re­cent cy­ber­crime at­tack,’ the bank said yes­ter­day in a re­search note.

Shares in TalkTalk, which peaked above 400p in June, fell another 4.1p to 240p.

York­shire-based chem­i­cals com­pany Croda In­ter­na­tional rose 98p to 2868p af­ter Gold­man Sachs put the stock on its closely watched con­vic­tion buy list and set a price tar­get of 3400p.

An­a­lysts at Gold­man ex­pect earn­ings to pick up thanks in part to im­prove­ments in its per­sonal care busi­ness, which makes chem­i­cals for prod­ucts in­clud­ing sun cream, lip­stick and de­odor­ant.

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