FTSE Higher on Morrison Performance

Ivaylo
21 Sep, 2006
New York City

In London, there was a speculative feel to trading, as Anglo-American surged on rumours that a Chinese mining company was looking to acquire a stake. Wm Morrison announced strong prformance after half-year profits and news on current trading exceeding forecasts. By mid-session, the FTSE 100 recovered from a dull opening to trade 0.5% higher.

[R]9:30AM The UK market recovers from weak start on Morrison results.[/R]
The FTSE 100 was higher by mid-session on Thursday. The benchmark index recovered from a dull opening to trade 30.4 points, or 0.5%, higher at 5,896.8.

Advancers

Morrisons, the supermarket group, which has been struggling to integrate the acquisition of Safeway, advanced 6.2% to a two-and-half year high after half-year profits and news on current trading exceeded forecasts. Anglo American, the FTSE 100 mining conglomerate, surged 3.7% in heavy trading as rumours continued to circulate that a Chinese mining company was looking to obtain a stake of the company. There were also good gains for Rio Tinto, up 2.7%, and Vedanta Resources, 2.3% higher.

Compass Group, the contract caterer, rose 4% amid talk that Richard Cousins, chief executive, was working on a break-up plan. Brewer Scottish & Newcastle moved up 1.2% amid talk of strong interest from Carlsberg, with whom it is had joint venture in Russia and Eastern Europe.

Reuters, the news and financial information company, climbed 3% after Morgan Stanley reiterated its overweight rating and target price. Rumours of a bid approach from Germany’s Metro saw Kesa Electricals trade 2.5%. Cable & Wireless firmed 1% after outlining plans to lift margins at its international business to 35-37% by 2008-09.

Decliners

On the downside, BP lost 0.55 while BG Group lost 1% as crude price showed little signs of recovering from recent weakness. International Power fell off 3.34%.

Economic news

Improving demand from abroad helped push UK manufacturers order books to their highest levels in 21 months, according to a report released on Thursday.

Corporate activity

BP, the UK oil group, and ExxonMobil, its minority partner on the Thunder Horse deepsea oil project, have been at odds over how to respond to mounting problems with the Gulf of Mexico oilfield. BP said on Monday it would have to delay the project again, this time targeting 2008 for production from the world’s largest semi-submersible oil and gas platform.