Hope for utilities consolidation drives FTSE up
Hopes of consolidation among water utilities drove the London market forwards today after Anglian Water owner AWG said it had received an approach from a potential bidder.
Shares in FTSE 250 stock AWG leapt 11% on the news while blue-chip rivals Kelda Group, Severn Trent and United Utilities were also in demand.
With B&Q owner Kingfisher offering encouragement over future trading the FTSE 100 Index jumped 38.5 points higher to 5930.7 by mid-morning.
Shares in AWG gained 147p to 1509p after it said it had received a preliminary approach from an unnamed suitor.
The positive sentiment leaked across the sector with Kelda up 32.5p to 844p, Severn Trent 42p higher at 1361p and United Utilities up 21p to 707p.
B&Q owner Kingfisher pleased the City after it said the UK DIY sector was showing signs of improvement. Like-for-like sales fell 8.8% at B&Q in the first quarter but only fell 2.3% in the second quarter and shares in Kingfisher gained 6.5p to 246.25p.
Meanwhile, mining stocks added strength to the top-flight index as metal prices recovered from their recent lows. Kazakhmys was up 43p to 1261p. It was followed up the leaderboard by Rio Tinto with a gain of 63p to 2574p, Xstrata, which lifted 49p to 2270p and BHP Billiton, which rose 20p to 949p.
Going in the other direction was Argos owner GUS, which slid 18.5p to 978.5p after it said second-quarter sales were down on its first quarter.
Insurance firm Old Mutual lost 3.25p to 164p after it only met City forecasts with a 36% rise in profits for the first half of the year, boosted by its acquisition of Skandia.
In the FTSE 250 Index, Premier Foods fell 4% or 7.25p to 188.25p after talks to buy businesses from United Biscuits collapsed.
