17th Feb 2014 13:46
LONDON (Alliance News) - UK stocks continue to trade significantly higher Monday, buoyed by a positive close in Asian equity markets, as investors focus on individual corporate news amid a dearth of macro economic data and a US holiday.
The FTSE 100 is up 1.1% at 6,734.37, the FTSE 250 is up 0.5% at 16,197.8, and the AIM All-Share index is up 0.3% at 878.38 as it looks to close higher for the eighth day in a row.
The UK's blue-chip index is being pushed higher by Hammerson. The property developer is the index's leading gainer, up 4%, at its highest level for over five years, after it reported an increase in profit and rental income for 2013.
The group posted pretax profit of GBP326.3 million for the year, up from GBP93.5 million in 2012, boosted by revaluation gains of GBP90.3 million. Gross rental income rose to GBP321.2 million for 2013, from GBP297.6 million a year earlier, while net rental income rose to GBP290.2 million, from GBP282.9 million.
Essar Energy, up 5.6%, is helping to lift the FTSE 250. The company's shares are leading the gainers in the index after its majority shareholder Monday made a 70 pence a share bid for the shares in the company it doesn't own, as it strives to take the company private less than four years after it listed a chunk of the business.
Essar Global Fund, owned by brothers Shashi and Ravi Ruia, had said Friday it was mulling a bid, and Monday said it would offer 70 pence for the outstanding shares and 80 US cents for each convertible bond due in 2016. Essar Global currently owns 78.02% of Essar Energy. Essar Energy is currently quoted at 69.70 pence.
DCC, up 4.4% is another big FTSE 250 gainer. The support services group's shares have jumped after the company reassured investors that the mild UK weather has not had as much impact as had been feared, says Jefferies analyst Justin Jordan. Alongside this, Jordan believes that acquisitions made in recent months will boost profitability from 2015 onwards.
Housebuilding stocks, including FTSE 100-listed Persimmon, which is up 1.7%, and FTSE 250-constituents Taylor Wimpey, up 2.6%, Berkeley Group, up 2.3%, and Barratt Developments, up 1.7%, are also supporting their respective indexes.
The gains come after the Rightmove house price index revealed that average UK house prices were up 3.3% month-on-month is February, following a 1% increase in January.
Elsewhere, Asian stocks closed materially higher earlier Monday. The Nikkei in Tokyo closed up 0.6%, the Shaghai Composite closed up 0.9%, and the Hang Seng closed up 1.1%.
The gains come after Japanese growth came in much weaker-than-expected, inferring that, "more stimulus will be on the way in coming weeks," says Michael Hewson, Chief Market Analyst at CMC Markets. Japan's GDP grew 0.3% quarter-on-quarter in the fourth quarter, missing forecasts for an increase of 0.7%.
Asian bourses were also led higher by the news that China's bank lending surged to a four-year high in January, "signalling that strength lies within the tiger yet," according to David White, financial trader at Spreadex. Banks lent CNY1.32 trillion worth of new loans in January, up from CNY482.5 billion in December.
European equity indices are not faring as well, however. Although both the DAX 30 in Frankfurt and CAC 40 in Paris are higher, both are only posting marginal gains.
In the commodities market, gold continues to trade near a 15-week high at USD1,326.9 per ounce, while the price of silver is at a 14-week high at USD21.770 per ounce.
With Wall Street closed for President's Day, and no fresh macro economic data due to be released, UK stocks look set to add to the recent strength that has been seen since the beginning of February.
By James Kemp; [email protected]; @jamespkemp
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Related Shares:
Berkeley GroupBarratt DevelopmentsHammersonPersimmonDCCTaylor Wimpey