Water companies are the clear winners in the FTSE 100 Index after shares surged due to signs that the UK’s inflationary bubble will boost results.
London’s top tier gained 19.4 points to 6002.8, helped by a steady finish on Wall Street overnight and despite further falls for commodity stocks following Royal Dutch Shell’s results disappointment.
Severn Trent and United Utilities gained by 4% after Bank of America Merrill Lynch introduced buy ratings on the pair to reflect higher inflation. Severn was up 59p to 1449p and United lifted 3% or 19p to 574p.
Lower-tier stocks Pennon and Northumbrian Water were raised to neutral from underperform, helping them raise 9p to 626p and 5.4p to 314p respectively.
Shell extended Thursday’s 3% loss with a 1% fall, down 16p to 2161.5p, after its fourth quarter profits and production performance left investors cold. Other energy stocks remained in the red, with BG Group off 1p to 1435p.
Cairn Energy was the biggest Footsie faller, down 12.8p to 425.2p, after reports that Vedanta Resources was considering pulling out of a deal to buy a majority stake in Cairn India.
And Thomson owner TUI Travel remained under pressure due to the impact of Egypt’s civil unrest on the holiday plans of thousands of customers. Shares dropped another 3.7p to 239.3p.
Outside the top flight, ITV surged 3.35p to 82.75p, as Tuesday’s bullish statement from RTL, Europe’s largest free-to-air broadcaster, continued to have a positive impact on the stock ahead of its results in March.
And retailer HMV soared 12% or 2.75p to 25.5p, boosted by speculation that private equity and former retail bosses are eyeing the business for takeover.
Superdry fashion label SuperGroup was also on the rise, ahead 6% after a 98p rise to 1928p, while retail rival French Connection soared 22% – up 14.8p to 83.7p – after the company said its profits for the year would be at least £6.8 million, above expectations.