Footsie boosted by banks’ rallying cry to buy British
THE London market rallied after two major banks said now was the perfect time to buy British stocks.
The FTSE 100 rebounded 1pc, or 74.31 points, to 7371.46 while the FTSE 250 rose 0.9pc, or 193.21 points, to 21,645.71 after JP Morgan analysts said London-listed firms looked ‘exceptionally cheap’. Meanwhile, Morgan Stanley said there was a ‘compelling case’ for buying stock in FTSE350 companies, as UK equities were ‘more defensive’ than global peers.
The assessment from the Wall Street banks was echoed by AJ Bell investment director Russ Mould, who noted that the lack of tech stocks in the FTSE100 may now be a blessing amid a sell-off.
He said: ‘The FTSE100 remains an outlier in global markets due to the construction of its index.
‘For years it was criticised for lacking exciting fast-growth tech stocks. That’s now worked to its advantage. Being dominated by the banking, energy and tobacco sectors means the FTSE100 has been one of the best performing major indices globally this year.’
The gains followed heavy losses on Monday when the FTSE100 fell 2.6pc and the FTSE 250 3.6pc. On Wall Street the main indices fell deep into the red before staging a huge comeback to close positively. But uncertainty continues to abound amid fears of interest rate rises and the growing tension between Russia and Ukraine.
Banks were among those leading the FTSE 100 higher in yesterday’s session. Standard Chartered jumped 5pc, or 24.3p, to 512.2p after analysts at UBS upped their target on the stock to 580p from 530p. The investment bank upgraded Natwest to ‘buy’ from ‘neutral’ and hiked its target to 290p from 230p. Natwest climbed 3.4pc, or 7.9p, to 273.8p.
Additionally, UBS upped its target for Lloyds to 62p from 60p, sending it up 3.3pc, or 1.64p, to 50.91p, and for HSBC to 590p from 500p, helping drive the shares 3.5pc, or 17.25p, higher to 509.4p. Barclays also gained 3.3pc, or 6.34p, to 196.7p after UBS raised its target to 265p from 250p.
Shell bobbed up 3.7pc, or 64.2p, to 1812p following reports it had struck oil off the coast of Namibia. Rival BP was also up 4.3pc, or 15.55p, at 379.65p as crude prices inched higher.
Mid-cap investment fund Baillie Gifford US Growth Trust added 3.5pc, or 7.5p, to 220.5p as the value of the assets in its portfolio rose 17.2pc in the six months to the end of November. However, the fund’s shares have lost around 28pc of their value this year amid the plunge in US tech stocks.
Asset manager Abrdn bounced 4.5pc, or 10.2p, to 239.4p after Credit Suisse rated the stock at ‘outperform’ with a target price of 290p, saying said it had one of the ‘best asset and revenue mixes’ and they were optimistic about its £1.5bn purchase of investment platform Interactive Investor.
Amur Minerals rocketed 68.7pc, or 1.43p, to 3.5p, after confirming it was in talks to sell Irosta Trading, which owns a nickel-copper mine in Russia, for up to £100m.
Pipe and drain maker TI Fluid Systems said chairman Manfred Wennemer will retire in May, to be replaced by independent director Tim Cobbold. It predicted a ‘robust’ performance for 2021 despite supply chain disruption and computer chip shortages. The shares fell 0.4pc, or 1p, to 240p.
Shares in egg-free cake maker Cake Box jumped 5.5pc, or 14p, to 268p after Jaswir Singh, the chief operating officer, bought 20,075 shares for £50,000, after a dip on Monday. Meanwhile, pub group Marston’s sales fell 3.9pc from pre-pandemic levels in the 16 weeks to January 12 as festive trading was hit by Omicron and Plan B restrictions. The shares were up 1pc, or 0.8p, to 78.9p.