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Strong earnings, Vectura boost British midcaps

By Reuters

By Devik Jain

(Reuters) -British midcaps rose on Wednesday, boosted by solid earnings updates from companies including Marks & Spencer and Softcat, while Vectura Group topped the mid-cap index after agreeing to a takeover by The Carlyle Group.

The domestically focused mid-cap index advanced 0.6%. Vectura Group surged 31.6% and was on track for its best day on record after the pharmaceutical company focused on inhaled medicines agreed to a 958 million pound ($1.36 billion) takeover by global investment firm The Carlyle Group.

Marks & Spencer climbed 4.5% after the retailer said it was making progress with its turnaround plan, had traded well in the early weeks of the 2021-22 year and that profits would recover.

The blue-chip FTSE 100 index edged 0.1% higher, with specialty chemical maker Croda International climbing 3% after Goldman Sachs upgraded the stock to “buy” from “sell”.

However, gains on the index were limited by a fall in heavyweight mining and banking stocks.

Asian shares rose too after U.S. Federal Reserve officials reaffirmed a dovish monetary policy stance, reassuring investors worried about the prospect of rising inflation, while hinting at talk of debating a “taper”. [MKTS/GLOB]

“Inflation worries are still on the back of average investor’s mind, but the Fed officials’ frequently repeated comments that the ‘rising inflation won’t last long’ has a hypnotizing and a soothing effect on sentiment,” said Ipek Ozkardeskaya, a senior analyst at Swissquote Bank.

“A robust growth is good news for recovery, obviously, but it’s bad news for inflationary pressures, as improved economic activity also means higher positive pressure on price levels.”

The FTSE 100 index has gained 8.9% year-to-date on optimism that speedy vaccine rollouts and constant policy support from the government would drive a stronger recovery from a pandemic-led recession.

Among other stocks, Softcat added 4.7% after the IT services and consulting firm said it expected annual results ahead of expectations.

Spire Healthcare Group jumped 24.9% after it agreed to a takeover offer from Australian hospital operator Ramsay Health Care for about 1 billion pounds ($1.41 billion).

(Reporting by Devik Jain in Bengaluru; Editing by Subhranshu Sahu)