Energy sector helps FTSE edge towards 5900
Hopes of consolidation in the energy sector combined with a flurry of corporate results to send the FTSE 100 Index towards the 5900 mark today.
Property developer Hammerson kicked off one of the busiest weeks of the year for corporate results with better-than-expected figures to send the stock up 5% and head the top-flight leaderboard.
It was followed by a number of utilities as the latest round of deal-making in the energy sector added further impetus to trading in London to lift the Footsie 15.4 points to 5875.9.
The biggest mover of the day was Hammerson, which gained 54.5p to close at a new high of 1156p, after it beat market expectations with a 31% rise in its closely-watched net asset value.
Investors also welcomed a 7.5% rise in pre-tax profits to £89.4m (€131.2m) for the UK’s fourth-largest property firm.
It was followed up the leaderboard by a number of utilities as investors speculated that the wave of consolidation among European rivals – led by today’s £47m (€69m) arranged marriage of French energy firms Suez and Gaz de France - would wash over to the UK.
Analysts said the Suez-Gaz de France merger and an offer from German firm E.ON for Spanish rival Endesa demonstrated that consolidation of European energy assets was in full swing.
With the UK utilities sector relatively fragmented, analysts talked up the possibility of bids in the near term.
International Power was the chief beneficiary in the sector, rising 10.75p to 295.75p, to set the pace for Scottish & Southern Energy and Scottish Power – up 17.5p and 8p to 1174p and 593.5p respectively.
Publishing giant Pearson was also in good shape today after it turned losses into profits at the Financial Times. Shares rose 2% or 13.5p to 719p as investors welcomed the FT’s recovery and strong gains at Penguin and its educational business which prints textbooks in the United States.
But gains by top-flight shares were capped by a decline from Vodafone after the mobile phone operator warned of slowing revenues growth and an impairment charge that could be as high as £28bn (€41.1bn).
Vodafone shares fell 3.25p to 113.75p and hit a new three-year low at one stage even though the company said its outlook for the current financial year remained unchanged.
Housebuilder Persimmon was down 12p to 1416p despite a 6% rise in profits and a strengthening of the housing market.
Elsewhere, one of the heaviest fallers of today’s session was Maiden after the outdoor advertising group said none of the recent offers it had received were in line with its share price.
Maiden shares fell 45% or 29p to 35.5p after the company said it was reviewing other options and talking to its lenders.
The day’s biggest top flight risers were Hammerson up 54.5p to 1156p, Sage Group up 11.75p to 283.75p, International Power 10.75p higher at 295.75p and GUS up 27p to 1067p.
The heaviest fallers were Vodafone down 3.25p to 113.75p, Reuters off 9.5p to 398p, Kazakhmys down 18p to 877p and Alliance & Leicester off 13.5p to 1125p.
