UK stocks have started the week in good form yet again, with a broad rally seeing every FTSE
sector in the green by mid-morning despite a very blank economic calendar, leaving improving investor sentiment to drive prices higher.
Underpinning the rally was also a strong overnight session in Asia, with new credit in China increasing to a record in January to offset concerns over a slowdown, although credit levels themselves have also been under fire in recent weeks, and with the market enjoying a surge like this you would expect a little more in the way of supporting data or a upward revisions to forecasts.
Punch Taverns have come under pressure at the start of the week after a weekend passed with no deal to restructure its debt. Last week should have seen a vote on new proposals put forward by the management team but they were withdrawn late on as it became apparent bondholders were likely to reject it. An alternative plan is supposedly under construction, but will not be released before an agreement with creditors is reached and for now the extended uncertainty over dealing with Punch’s £2.3bln debt burden has been enough to scare off investors.
Hammerson have painted a healthy picture of the UK retail sector this morning after reporting a big boost in pre-tax profits, with retail trading strong and a £90m revaluation gain providing a welcome kick. Directors have recommended an 8% increase in final dividend and will also progress with plans to build a new Cinema at its flagship Bullring Shopping centre in Birmingham. The performance and positive comments on the industry from Chief Exec David Atkins seems to have given a bit of lift to the rest of the retailers this morning, with Debenhams, M & S and Next all firmly in the green.
Fidessa shares also advanced despite posting a 2% drop in full year profits and flat revenues. The trading software firm have been hit by consolidations in the financial sector but still expect modest growth in 2014.
Today’s Rightmove figures gave no indication that the house price surge is coming to a close, with the biggest YoY rise since 2007 pushing the average asking price over the 1pc stamp duty level of 250k, meaning bigger mortages and a big rise in upfront costs for 1st time buyers.
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