LONDON: The UK’s domestically focused mid-cap FTSE 250 ended higher on Thursday, while the main FTSE stock index nudged up in light trading volumes, with Direct Line boosting the insurance sector after rejecting Aviva’s $4.16 billion takeover bid.
The FTSE 100 held its ground at 8,281.22 points, while the FTSE 250 climbed 0.8%. The Thanksgiving holiday in the US kept the trading volumes light throughout the day.
Insurance stocks jumped 5.9%, registering their biggest one-day gain in four years, with Direct Line Insurance jumping 41% after rejecting Aviva’s bid, saying it “substantially undervalued” the company. Aviva’s shares fell 2.3%.
“I think the expectation is that there will be more than just that first offer and clearly it does suggest that there is interest in this space,” said Danni Hewson, head of financial analysis at AJ Bell.
Spirax-Sarco Engineering rose 3.9% on positive rating actions by two brokerages on the valve-maker’s stocks, while Sainsbury rose 3.1% after J.P.Morgan upgraded the supermarket’s shares to “overweight” from “underweight”.
Among major movers, Renewi soared 46% after asset manager Macquarie’s preliminary takeover deal of the waste management firm for 700.9 million pounds ($888 million).
Dr Martens climbed 11.8%, with a brokerage attributing the gain to the bootmaker’s better-than-expected first-half results.
On the flip side, Energean dropped 8.6% to the bottom of the FTMC index after the gas producer lowered its full-year production forecast.
Meanwhile, one of the country’s most experienced retail veterans said Britain’s tax-raising budget showed the government did not understand business. Finance Minister Rachel Reeves’ Oct. 30 budget has been criticised by businesses after she tapped companies for an additional 25 billion pounds of taxes a year to rebuild public services.
Additionally, business sentiment in Britain’s services sector is falling at the fastest rate in two years, partly as a result of tax rises in Reeves’ first budget.
Wednesday’s strong US inflation data raised concerns about a cautious stance on US rate cuts.
Back in the UK, traders expect the Bank of England to hold borrowing costs steady amid concerns about inflation rising again.
