MARKET REPORT: Buyout firm 3i leads blue chips rally as investors pile back in

Shares in some of Britain’s biggest companies hit record levels yesterday as investors piled cash back into the stock market.

Engineering giant Rolls-Royce, defence group BAE Systems, High Street stalwart Next and private equity firm 3i were among those to achieve highs on a bumper day for investors.

The gains came as stock markets around the world soared on rising hopes that interest rate cuts are around the corner.

The FTSE 100 index rose 1.9 per cent, or 145.17 points, to 7882.55 – its highest for 11 months – and the FTSE 250 climbed 1.3 per cent, or 256.91 points, to 19741.31.

Blue chip buyout firm 3i – London’s largest listed private equity company – soared 8.7 per cent, or 220p, to 2748p after it said business is booming at its biggest investment, Benelux discount retailer Action. 

Gains: The FTSE 100 index rose 1.9%, or 145.17 points, to 7882.55 – its highest for 11 months – and the FTSE 250 climbed 1.3%, or 256.91 points, to 19741.31

Rolls-Royce continued its charge higher, adding another 3.3 per cent, or 13.5p to stand at an all-time high of 420.2p. 

That took gains since ‘Turbo’ Tufan Erginbilgic took over last January to 350 per cent – meaning they have more than quadrupled in value.

BAE Systems (up 1.2 per cent, or 15.5p, to 1351.5p) and Next (up 6.7 per cent, or 568p, to 9078p) were also among the record-breakers while Melrose Industries gained 2.8 per cent, or 18.2p, to 664.2p to hit a high.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: ‘A big handful of FTSE 100 stocks have reached all-time highs with aerospace stocks helped by heightened geo-political tensions, others showing prowess in the highly competitive retail space, while rising metals prices have benefited some miners more than others. 

They have helped the FTSE 100 regain some of its mojo, although the index is still short of the high reached above 8000 points back in February last year.’

But while Melrose was toasting record highs, its spin-off Dowlais was stuck firmly in reverse.

The firm said revenues for the year will be similar to 2023 levels as demand for its drive systems is hit by a decline in worldwide production of light vehicles.

The company, spun out from Melrose Industries last year, reported a near-6 per cent rise in revenues for 2023 to £4.9billion. 

But losses widened to £522million. Dowlais announced a £50million share buyback over the 12 months from April and declared a final dividend of 2.8p a share. 

But the stock fell 9.7 per cent, or 8.74p, to 81.2p, leaving it close to record lows.

The shares started trading at 146p each in April last year but have since fallen around 40 per cent.

Although it hasn’t quite slipped under the radar, one takeover which has not attracted quite the same level of attentions as say the pursuit of Direct Line (up 0.1 per cent, or 0.2p, to 211.7p) or Currys (up 1.3 per cent, or 0.75p, to 60.8p) comes in the world of big sheds.

Tritax Big Box, which builds vast warehouses, or distribution centres, across the country for the likes of Amazon, has agreed to buy rival UK Commercial Property for £924million. 

Tritax shares climbed 2.7 per cent, or 4p, to 154.1p and UK Commercial Property soared 5 per cent, or 3.2p, to 67.9p.

This post first appeared on Dailymail.co.uk