Market report

More records broken, housebuilders deal sealed

Traders on Wall St (pic: NYSE)
Markets continue to rise

Surging stock markets will require the Guinness Book of World Records to be updated, says Dan Coatsworth, investment analyst at AJ Bell.

UK and US equities have been racking up new highs on multiple occasions and Thursday was the turn of the S&P 500, Nasdaq and Dow Jones to ascend to new record levels.

“Investors have been pumped up by the latest inflation reading, believing it is cool enough to stir the Federal Reserve into action and cut rates in the near future.

“It also helps that quite a few US companies are getting a positive reaction to their latest results, together lifting the general mood around the markets and firing up enthusiasm to make trades,” said Coatsworth.

In the UK, shares in the BT surged 19.5p, or 17.2%, to 132.5p, the largest single-day rise in the company’s history as investors warmed to its prospects.

Watches of Switzerland rose 67.25p, or 20% to 405p after saying it was “cautiously optimistic” about the outlook for its present financial year.

Despite the stand-out gains, the FTSE 100 fell by 7.15 points, or 0.1%, to 8,438.65.

Among the fallers were EasyJet whose shares closed 31.75p, or 6%, lower at 497.75p after announcing that it is seeking a new CEO. British Airways owner International Consolidated Airlines Group and Wizz Air fell on a flatter outlook for the summer season.

Barratt Redrow ready to roll

A proposed merger between two of the UK’s largest housebuilders has gained the support of shareholders of both companies.

Barratt Developments announced its £2.5 billion takeover of Redrow in February. Barratt shareholders will get 67.2% of the newly-named Barratt Redrow with Redrow shareholders holding the remaining shares.

It will become a third brand and division of the group, alongside Barratt Homes and David Wilson Homes. The group will have a turnover of £7.45bn.

The merger is expected to generate pre-tax cost savings of at least £90m a year by the third year after completion.

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