MARKET REPORT: Footsie boosted by banks’ rallying cry to buy British

The London market rallied after two major banks said now was the perfect time to buy British stocks.

The FTSE 100 rebounded 1 per cent, or 74.31 points, to 7371.46 while the FTSE 250 rose 0.9 per cent, or 193.21 points, to 21,645.71 after JP Morgan analysts said London-listed firms looked ‘exceptionally cheap’. 

Meanwhile, Morgan Stanley said there was a ‘compelling case’ for buying stock in FTSE 350 companies, as UK equities were ‘more defensive’ than global peers.

Stocks rally: The FTSE 100 rebounded 1% while the FTSE 250 rose 0.9% after JP Morgan analysts said London-listed firms looked ‘exceptionally cheap’

The assessment from the Wall Street banks was echoed by AJ Bell investment director Russ Mould, who noted that the lack of tech stocks in the FTSE 100 may now be a blessing amid a sell-off.

He said: ‘The FTSE 100 remains an outlier in global markets due to the construction of its index.

‘For years it was criticised for lacking exciting fast-growth tech stocks. That’s now worked to its advantage. Being dominated by the banking, energy and tobacco sectors means the FTSE 100 has been one of the best performing major indices globally this year.’

Stock Watch – Novacyt

Shares in diagnostics firm Novacyt tumbled to their lowest level in nearly two years after predicting a sharp drop in demand for Covid-19 tests.

It expects sales of the tests to fall by 50 per cent this year compared to 2021, although this would be partially offset later in the year by the arrival of new products.

The sales plunge threatens to severely dent Novacyt’s revenues, 86 per cent of which came from Covid-19 products last year. 

The shares slumped 23.1 per cent, or 55.1p, to 183.8p.

 

The gains followed heavy losses on Monday when the FTSE 100 fell 2.6 per cent and the FTSE 250 3.6 per cent. 

On Wall Street the main indices fell deep into the red before staging a huge comeback to close positively. But uncertainty continues to abound amid fears of interest rate rises and the growing tension between Russia and Ukraine.

Banks were among those leading the FTSE 100 higher in yesterday’s session. Standard Chartered jumped 5 per cent, or 24.3p, to 512.2p after analysts at UBS upped their target on the stock to 580p from 530p. 

The investment bank upgraded Natwest to ‘buy’ from ‘neutral’ and hiked its target to 290p from 230p. Natwest climbed 3.4 per cent, or 7.9p, to 273.8p.

Additionally, UBS upped its target for Lloyds to 62p from 60p, sending it up 3.3 per cent, or 1.64p, to 50.91p, and for HSBC to 590p from 500p, helping drive the shares 3.5 per cent, or 17.25p, higher to 509.4p. Barclays also gained 3.3 per cent, or 6.34p, to 196.7p after UBS raised its target to 265p from 250p.

Shell bobbed up 3.7 per cent, or 64.2p, to 1812p following reports it had struck oil off the coast of Namibia. Rival BP was also up 4.3 per cent, or 15.55p, at 379.65p as crude prices inched higher.

Mid-cap investment fund Baillie Gifford US Growth Trust added 3.5 per cent, or 7.5p, to 220.5p as the value of the assets in its portfolio rose 17.2 per cent in the six months to the end of November. 

However, the fund’s shares have lost around 28 per cent of their value this year amid the plunge in US tech stocks.

Asset manager Abrdn bounced 4.5 per cent, or 10.2p, to 239.4p after Credit Suisse rated the stock at ‘outperform’ with a target price of 290p, saying said it had one of the ‘best asset and revenue mixes’ and they were optimistic about its £1.5billion purchase of investment platform Interactive Investor.

Amur Minerals rocketed 68.7 per cent, or 1.43p, to 3.5p, after confirming it was in talks to sell Irosta Trading, which owns a nickel-copper mine in Russia, for up to £100million.

Pipe and drain maker TI Fluid Systems said chairman Manfred Wennemer will retire in May, to be replaced by independent director Tim Cobbold. It predicted a ‘robust’ performance for 2021 despite supply chain disruption and computer chip shortages. The shares fell 0.4 per cent, or 1p, to 240p.

Shares in egg-free cake maker Cake Box jumped 5.5 per cent, or 14p, to 268p after Jaswir Singh, the chief operating officer, bought 20,075 shares for £50,000, after a dip on Monday. 

Meanwhile, pub group Marston’s sales fell 3.9 per cent from pre-pandemic levels in the 16 weeks to January 12 as festive trading was hit by Omicron and Plan B restrictions. The shares were up 1 per cent, or 0.8p, to 78.9p.

This post first appeared on Dailymail.co.uk