FTSE bounces back on round of acquisitions - London Report

BRITAIN’S top share index bounced back yesterday from a two-week low the day before as acquisitions boosted Imperial Tobacco, cement maker CRH and International Consolidated Airlines Group.

The blue-chip index extended gains in late trade on the prospect of an accord between Greece and its creditors after a Greek government official told Reuters that a staff-level agreement was being drawn up.

But European Commission Vice President Valdis Dombrovskis said Greece and its international creditors were not yet at the point of drafting an agreement.

Shares in CRH rose 3.5 per cent to the top of the FTSE 100 on news that it was set to buy assets from rival Holcim and Lafarge.

Imperial Tobacco rose 3.3 per cent as traders welcomed acquisition plans that would increase its market share.

British Airways owner IAG was up 3.2 per cent after the Irish government cleared the way for it to bid for Aer Lingus .

The FTSE 100 closed 1.2 per cent higher at 7,033.33 points, recouping its fall in the previous session.

The index is up around 6 per cent since the start of 2015 but has struggled to make headway since touching a record high last month. The corporate takeover activity should help, said Toby Campbell-Gray, head of trading at Tavira Securities.

“The fact that there is this M&A (merger and acquisitions) activity will underpin this market,” he said.

Queen Elizabeth said yesterday the government would pass a law paving the way for a referendum on whether Britain would remain a member of the European Union. The vote is considered a risk for the market.

“The referendum announcement was widely expected, but its importance should not be underestimated,” said Peter Cameron, assistant fund manager at Ecclesiastical Investment Management. “If the polls are close as the campaigns get under way, then the uncertainty leading up to polling day could lead to all manner of market volatility.”

Among other movers, Lloyd’s of London insurers Beazley and Hiscox rallied after JPMorgan analysts named the pair their top picks in the sector and upgraded them to “overweight” from “neutral”.

Banknotes printer De La Rue fell 8.9 per cent to a four-month low after reporting a 22 per cent drop in full-year underlying operating profit.