Takeover talk breathed life into the FTSE 100 yesterday as traders predicted that London’s leading benchmark index could break through the 6,900-point barrier over the next few days.
After a slow start to the day, a bid approach for the drug maker Shire from its US rival AbbVie helped to prop up the Footsie, meaning that the sell-off in pub companies, sportswear chains and bookies that often comes with an England exit from a major tournament failed to materialise.
Instead, the FTSE 100 rose 19.2 points to 6,825.2 and the FTSE 250 edged up 97.55 to 15,781.43.
Garry White, the chief investment commentator at Charles Stanley, said: “The UK blue-chip index closed at 6,930.20 on 30 December, 1999, when it also hit an intra-day high of 6,950.60. The index has failed to surpass this level so far this century, but it is currently within 100 points of this record high.
“Many expected it to breach this level earlier this year, but it did not happen. Can it pass this level in the next few weeks? Maybe – but not if the situation in Iraq gets any worse.”
One big talking point was Diageo, which finally looks set to raise its stake in India’s United Spirits from 28 per cent to 55 per cent. The maker of Johnnie Walker Scotch and Smirnoff vodka is hoping to increase its exposure to India’s £10bn spirits market.
Previous attempts to increase its holding in United Spirits – built up by the colourful Indian entrepreneur Vijay Mallya – have failed but this time Diageo, which rose 1p to 1,854p, looks set to cross the finishing line.
News that J Sainsbury plans to take on discount retailers by launching 15 Netto stores by the end of next year failed to boost the supermarket giant, which dipped 4.5p to 316.8p. Rival Tesco was also down 0.55p to 290.35p.
Elsewhere, Kier rose 78p to 1,754p as the broker Westhouse slapped a Buy recommendation on the the construction group. Its analyst Alastair Stewart noted Kier’s acquisition of support services group May Gurney last year and said: “We see Kier as, on balance, the stock best exposed to a gathering recovery in UK construction.”Reuse content