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London rallies as takeover news helps lift confidence
Hopes of major takeovers in the transport and mobile phone sectors helped provide direction for the London market yesterday.
FirstGroup's pursuit of a possible merger with fellow FTSE 250 Index firm National Express boosted shares in its rival and caused other firms in the sector to surge on Monday.
Vodafone's reported interest in a bid for T-Mobile UK also attracted attention in the top flight, with the FTSE 100 Index closing up 53.02 points at 4294.03.
A positive start to trading for America's Dow Jones Industrial Average saw the Footsie gain momentum late in the session, having earlier struggled to move away from its opening mark.
Oil prices moving above $71 a barrel added to the positive sentiment.
But it was a potential takeover of T-Mobile by Vodafone that provided much of the interest within the Footsie.
Such a deal would give Vodafone 40 per cent of the UK market by revenue – propelling it into pole position above rival O2.
However, this was not enough to inspire its share price, which advanced by just 1.2 per cent, or 13/4p, higher to 1175/8p.
The lukewarm response came as analysts expressed doubt that a combination with T-Mobile UK would be able to escape the interest of regulators.
Meanwhile, a broker upgrade from Goldman Sachs for Lloyds Banking Group helped the blue chip to stand out at the head of the risers' board, climbing more than 6 per cent, or 41/8p, to 701/2p.
The rest of the banks followed Lloyds' lead, with Royal Bank of Scotland ahead 7/8p to 39p and Barclays up 111/2p to 2795/8p.
An upgrade lifted car insurer Admiral, ahead 271/2p to 8831/2p, while life and pensions firm Prudential recovered from weakness last week to add 231/2p to 4223/4p. Aviva climbed 111/4p to 3411/2p.
In the second-tier, debt-laden National Express advanced by 10 per cent, or 27p, to 3023/4p after it said that it had rebuffed the approach from FirstGroup.
The interest boosted hopes of consolidation in the sector, with Arriva ahead 93/4p to 422p and Stagecoach up 21/4p to 127p.
Southern franchise owner Go-Ahead lost an earlier gain to fall 6p to 1231p, while FirstGroup retreated by 43/4p to 366p after its takeover target said it did not consider it appropriate to enter talks with its larger suitor "at present".
Another of the biggest gains in the FTSE 250 Index came from Hargreaves Lansdown after the fund management firm said it expected full-year results to be above market forecasts. Shares bounced 9p to 210p, a gain of 4 per cent.
Assets held in Hargreaves' Vanguard 'fund supermarket' platform for investors increased by 15 per cent to 10.6bn during April and May, the firm said.
The group's overall revenues for the 11 months to May 31 were also around 10 per cent ahead of the previous year.
Moneysupermarket was 23/4p stronger at 511/4p amid hopes it has benefited from the signs of increased activity in the personal finance sector.
Retailer HMV joined the group on the risers' board – up by 4p to 1183/4p – ahead of its full-year results today.
The biggest Footsie risers were Lloyds Banking Group, Prudential, Rio Tinto up 93p to 2153p and Barclays.
The biggest Footsie fallers of the session were 3i Group, down by 5p to 2371/2p, Xstrata slipped by 137/8p to 6721/8p, Thomas Cook Group fell 37/8p to 1997/8p and British Airways ended the day 13/4p lower at 1271/2p.
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Weather for Yorkshire
Sunday 12 February 2012
Today
Light rain
Temperature: 1 C to 6 C
Wind Speed: 8 mph
Wind direction: North west
Tomorrow
Sunny spells
Temperature: 4 C to 8 C
Wind Speed: 16 mph
Wind direction: West
