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UK mid-caps hit record high on recovery hopes; M&A chatter boosts Meggitt

05/07/2021 | 12:12pm EDT
FILE PHOTO: The London Stock Exchange offices in the City of London, Britain

(Reuters) -Britain's mid-cap index closed at a record high on Friday as hopes of a stronger economic recovery lifted industrial and consumer discretionary stocks, while Meggitt shares soared on a takeover report.

The domestically focused mid-cap FTSE 250 index advanced 1.2%, with industrial stocks, including Easyjet Plc, IMI Plc and Pagegroup Plc, rising between 2.7% and 5.1%.

The blue-chip index rose 0.7%, clocking its best week since April with Melrose Industries adding 1.8% after Morgan Stanley raised its price target on the engineer's shares.

Mining stocks, mainly Anglo American, Glencore Plc and Rio Tinto Plc, provided the biggest boost on the index, gaining between 0.7% and 3.6%.

"The solid rise comes after the BoE upgraded its growth forecasts for the UK. Confirmation of stronger growth from the BoE has added to market confidence that the recovery is firmly on track," said Sophie Griffiths, market analyst, UK & EMEA, OANDA.

"With further easing of lockdown measures later this month, economic growth is likely to accelerate."

Both the indexes have gained 10% year-to-date as investors flocked to energy, materials and banking stocks that are seen benefiting the most from a stronger economic recovery due to speedy COVID-19 vaccine rollouts and government policy support.

St. Modwen Properties surged 20.0% to the top of midcap index after it received a potential takeover offer from private equity firm Blackstone , valuing the property developer at around 1.21 billion pounds ($1.68 billion).

Meggitt jumped 8.3% on a report that U.S. group Woodward Inc was looking to acquire the UK aero-engineer.

Barclays gained 2.5% after activist investor Sherborne sold its 6% stake in the company, disbanding its efforts to overhaul the British bank.

(Reporting by Devik Jain and Shivani Kumaresan in Bengaluru; Editing by Subhranshu Sahu and Steve Orlofsky)

By Shivani Kumaresan and Devik Jain

© Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIAN DOLLAR / BRITISH POUND (AUD/GBP) -0.16% 0.5457 Delayed Quote.-2.78%
BARCLAYS PLC 0.75% 180.4 Delayed Quote.22.99%
CANADIAN DOLLAR / BRITISH POUND (CAD/GBP) 0.00% 0.583124 Delayed Quote.1.41%
EURO / BRITISH POUND (EUR/GBP) -0.10% 0.85812 Delayed Quote.-3.84%
FTSE MID 250 INDEX 0.55% 22734.13 Delayed Quote.10.96%
GLENCORE PLC 2.88% 329.1 Delayed Quote.41.24%
IMI PLC 0.06% 1702 Delayed Quote.46.09%
INDIAN RUPEE / BRITISH POUND (INR/GBP) 0.00% 0.009678 Delayed Quote.-3.66%
US DOLLAR / BRITISH POUND (USD/GBP) 0.00% 0.708938 Delayed Quote.-3.49%
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