Royal Mail’s parent company enjoyed its best day on the stock market since the pandemic as analysts cited a turnaround in fortunes for the delivery group.
Shares in International Distributions Services (IDS) gained 11.4 per cent, or 27.7p, to 269.9p, marking the biggest one-day rise since September 2020.
Royal Mail has been hampered by strikes, a slump in letter writing, weaker parcel volumes and huge losses.
But in a much-needed boost ahead of Christmas, analysts at the Bank of America said the delivery firm is ‘progressing steadily’ now that a union agreement has been implemented and it is winning back volume share.
The broker upgraded its rating on IDS, adding it expects the union deal to have a positive impact on Royal Mail’s finances.
First class: Analysts at the Bank of America said Royal Mail is ‘progressing steadily’ now that a union agreement has been implemented and it is winning back volume share
Households and businesses will also be hoping it results in more reliable deliveries this Christmas and beyond.
On the wider market, the FTSE 100 inched down 0.03 per cent, or 2.12 points, to 7542.77 and the FTSE 250 lost 0.47 per cent, or 88.27 points, to 18,662.12.
Fresh data across both sides of the Atlantic left investors speculating where interest rates were heading.
In the UK, wage growth slowed in the three months to the end of October while inflation in the US fell to 3.1 per cent in November compared to 3.2 per cent the month before.
Oil prices were on the slide with a barrel of Brent crude dropping nearly 4 per cent towards $73. Rolls-Royce shares passed 300p for the first time since July 2019.
The jet engine maker’s latest gains came after an upgrade from credit ratings agency Fitch.
Michael Hewson, chief market analyst at CMC Markets, said Fitch’s positive outlook could see Rolls consider resuming its dividend payments next year. Shares rose 2.6 per cent, or 7.8p, to 304.7p.
Stock Watch – Smartspace Software
Shares in Smartspace Software soared after a £25m takeover offer.
The AIM-listed tech group has been approached with several proposals from Skedda, the online booking and scheduling platform.
The latest offer of 82p per share values Smartspace at £25million.
Its largest shareholder supports the proposal.
Skedda has until January 9 to decide whether to make a firm offer or walk away.
Smartspace shares rocketed 113.4 per cent, or 38p, to 71.5p.
Flooring firm Headlam said strong trading over the summer cooled in September and October as customers spent less doing up their homes. Shares fell 2.8 per cent, or 6p, to 205p.
Rio Tinto rose 0.6 per cent, or 33p, to 5517p following an upgrade from JP Morgan, which expects the miner to benefit from rising iron ore demand next year.
But rival Anglo American came under further pressure following a bleak update last week that sent the stock down almost 20 per cent.
Shares slumped 5.2 per cent, or 93p, to 1696p. Car dealer Vertu Motors rose 0.7 per cent, or 0.5p, to 71.1p after its second-largest shareholder, Cinch, increased its stake to 7.07 per cent from 6.07 per cent.
Begbies Traynor bought SDL, a Nottingham-based firm of property auctioneers, in a deal worth up to £3.25million.
It came a day after the insolvency group said business is booming as higher interest rates push more firms into bankruptcy. Shares rose 0.9 per cent, or 1p, to 112.5p.
Medical devices maker Belluscura will start selling its portable oxygen concentrator in Singapore after it gained approval from the country’s health sciences authority. Shares surged 12.2 per cent, or 2.5p, to 23p.
It was a tough session for RWS after it swung to a loss.
The translation and language services group, which helps customers break down communication barriers and has seen its chat tool used by US soldiers based in South Korea, made a loss of £10.9million in the 12 months to the end of September, having made an £83.2million profit the year before.
It came after the group took a £62.4million one-off hit against its technology division due to the impact of higher interest rates. Shares dropped 10.7 per cent, or 26.4p, to 221.2p.
South Wales car battery firm DG Innovate extended its gains a day after it hired three former Tesla executives. Shares, which jumped 176 per cent yesterday, increased 39.6 per cent, or 0.05p, to 0.17p.
