Babcock wins backing of investors but FTSE static

The smaller of London’s two biggest indexes managed to outperform its larger rival as shares in Babcock surged on Tuesday.

The FTSE 250 ended the day up 1/2 per cent while the FTSE 100 was practically flat, ending up just 1.37 points to 6,890.49.

The difference between the two was in no small part because of Babcock. The defence contractor surprised investors with the announcement that it would slash around 1,000 jobs and wrote down £1.7bn.

But investors rewarded the move with a 32 per cent share price increase when markets closed on Tuesday. The company unveiled a turnaround plan which included raising at least £400m from selling assets.

But markets otherwise remained subdued in London. The FTSE 100’s finish compared unfavourably next to some of its European counterparts.

The Dax and Cac in Frankfurt and Paris rose 0.1 per cent and 0.4 per cent respectively.

Meanwhile, across the Atlantic, the Dow Jones was trading down 0.4 per cent as markets closed in Europe, while the S&P 500 rose 0.1 per cent.

“Contributing to the weak open from the US was the FDA’s warning that use of the Johnson & Johnson covid-19 vaccine needs to be paused, for similar reasons to the blood-clotting fears caused by the AstraZeneca/Oxford jab,’’ said Spreadex analyst Connor Campbell.

News that the UK’s GDP grew despite lockdown was welcomed by analysts on Tuesday morning, as industrial and manufacturing production exceeded expectations.

Sterling was flat against the dollar, buying 1.3739, and dipped 0.2 per cent buying 1.1513 euros.

The price of Brent crude oil rose 1 per cent to 63.92 dollars per barrel.

Just Eat Takeaway.com led the FTSE 100 as it soared 6.8 per cent after releasing sales data for the last three months. Order numbers soared by nearly four fifths to 200m amid lockdown, the takeaway giant said.

It was joined in the green by JD Sports, which revealed that it expects its current financial year to be rosier than first thought. Shares rose 3 per cent as it upgraded its profit outlook.

The positive news continued with Quiz. The dress-seller said that it expects more people to start buying its celebration wear, such as dresses, when they are able to celebrate again. Shares rose 8.3 per cent.

Model railway seller Hornby saw shares shoot up more than 7 per cent after telling investors it had increased sales by more than a quarter. Sales for the financial year ending March 31 were 28 per cent ahead of the previous year, and ahead of budget, the company said fourthquarter sales were “very encouraging’’.

Recruiter Hays rose 3.6 per cent as it said that it expects to beat expectations with an £85m operating profit in the year to the end of June.

Revolution Bars Group was also in the green despite falling to an £18m pre-tax loss for the last half-year. Shares rose 5.3 per cent.

Land Sec said that it had collected 67 per cent or rent due for the quarter ending March, with agreements that might see that rise to 77 per cent in time. Its shares rose 1 per cent.

The biggest risers on the FTSE 100 were Just Eat Takeaway.com, up 501p to 7855p, Polymetal ,up 52p to 14991/2p, Auto Trader ,up 19.8p to 590.4p, JD Sports, up 27.2p to 940.8p, and Weir Group, up 501/2p to 1894p.

The biggest fallers on the FTSE 100 were United Utilities, down 22.8p to 946.8p, Severn Trent, down 39p to 2393p, Lloyds, down 0.64p to 433/4p, SSE, down 22p to 1511p, and IAG, down 2.95p to 203.4p.