THURSDAY MARKET CLOSE: New five-month FTSE high

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Drugs giant Shire gave the London market a shot in the arm with better-than-expected quarterly figures and higher profit forecasts

Shares in the pharma firm added more than 9 per cent, up 235p at 2,760p after it said increased sales growth should see it enjoy a “mid-to-high teens” profits lift this year.

Better production figures from China also helped the FTSE 100 Index, which added 38.7 points at 6,713.18, its highest close since May.

Alastair McCaig, market analyst at IG, said: “Wednesday’s corrective pull-back has been short-lived as the FTSE has used the overnight Chinese manufacturing data as a catalyst to once again return to a risk-on way of thinking.”

Surging profits at Spanish-owned rival Santander helped the London-listed banks, with Royal Bank of Scotland up 4.4p to 356.5p.

Lloyds Banking Group and Aberdeen Asset Management enjoyed bigger rises as investors welcomed the news of talks over a sale of Scottish Widows Investment Partnership. Aberdeen was up almost 6 per cent at 450.4p, despite a luke-warm reaction from analysts. Lloyds added 2.2p to 80.12p, a level not seen since 2009.

Engines giant Rolls-Royce was also powering ahead – up 30p to 1,174p – after it announced a contract worth £22 million to supply oil rig equipment to Samsung Heavy Industries of Korea.

Car dealership group Inchcape saw shares motor on after it reported a 7 per cent jump in quarterly sales. The shares added 22p at 644.5p.

Haulier Stobart Group was also on the move, advancing 1p to 130.5p after first-half revenue from continuing operations jumped 33 per cent as the firm’s mid 2012 acquisition of Autologic started to pay off.