The country might be under snow and ice but punters were keeping the stock market hot yesterday as the blue-chip index reached a four-and-a-half year high.
The outlook appeared more upbeat than icy as another 26.57 points were added to the FTSE 100 index taking it to 6,180.98 with traders putting the optimism down to encouraging remarks by the Bundesbank that Germany's economy was showing signs of improvement.
As well as "easing worries about the outlook of the German economy", financial spread-betting outfit ETX Capital also said the rise was due to progress in the States by lawmakers on raising the debt ceiling.
But others thought the rise was just a sign of investors playing wait and see. Michael Hewson, senior market analyst at CMC Markets, said: "It seems likely that investors are happy to sit on their hands ahead of some key economic data out later this week."
US markets were closed yesterday for Martin Luther King day, and with no bad news to burst the buoyancy some traders hoped the FTSE index could finish above 6,200 this week.
But despite the positive sentiment across Europe yesterday, there were some in London who thought there could be a change of heart later in the week.
Mike van Dulken, head of research at Accendo Markets, said: "General sentiment is good. But we have key macro ingredients this week with German economic surveys, the UK fourth-quarter GDP and a eurogroup meeting to think about."
Helping drive the benchmark index in the right direction was car insurer Admiral Group. Analysts at Goldman Sachs rated the insurer a buy and have added it to their "conviction list" of stocks to own.
They upped their price target to 1,500p and the shares responded by swerving into the fast lane of the benchmark index – adding 57p to 1,211p to take top spot.
Goldman's reasoning is all about the Government's planned change in the way we can make insurance claims. The rise in spurious whiplash claims will be a thing of the past when a cap on the fees lawyers and claims management companies can charge comes in to force, the bank reckons. Fewer claims will reduce costs for insurers and thereby lower premiums for consumers.
The lower premium rates have seen the brake applied to Admiral's share-price recently. But Goldman's scribes think "as a result of renegotiated reinsurance terms" Admiral is bound to benefit.
There were plenty of reasons to drop some stocks. Engineer Meggitt, down 7.8p to 429.4p, suffered after it emerged that it owns the company that supplied the battery-charger units for Boeing's now grounded Dreamliner air fleet.
Rumours of poor sales at DIY retailer Kingfisher sent its shares down 4p to 268.9p and analysts at HSBC took the red pen to temporary-power supplier Aggreko. They cut the share-price target to 1,650p and the shares were 24p adrift to 1,806p.
UBS analysts must be off the booze for January as they downgraded spirit giant Diageo from a buy recommendation to neutral. They soberly reduced their share-price target to 2,000p from 2,050p and said "after an intense two years of activity" they now see mergers and aquisitions "less likely". The share price of the Guinness to Smirnoff vodka group gurgled down 23.5p to 1,819.5p.
Brit-fashion star Burberry was knocked by an update from Swiss luxury peer Richemont. The Cartier to Net-a-Porter owner said its Asian sales growth had slowed and the outlook for the region was "unclear". Burberry's shares lost 19p to 1,367p in response.
Ocado was top of the mid-tier index, gaining 8.05p to 95.05p, but this is still only just above half of its July 2010 flotation price of 180p.
Rumours that the suspension of drilling around the Bahamas could be lifted at some point were doing the rounds. Bahamas Petroleum, which sank after the suspension was announced following the Gulf of Mexico oil spill in 2010, has jumped more than 40 per cent during the last 12 months and added another 0.38p to 5.68p yesterday. The company made a statement, saying it noted the recent rise but "confirms that it is not aware of any specific reasons for this movement".
Buy: JD WETHERSPOON
Raise a glass to JD Wetherspoon and buy its shares, analysts at Jefferies recommend. Jefferies scribes reiterate their buy recommendation and 600p price target for the shares. Jefferies claims the pub group is addressing the issues of declining profit growth and they expect sales momentum to translate into margin progression in due course. The shares were 500p.
Ditch shares in publisher Pearson, Liberum Capital scribblers suggest. Pearson has – for the first time in a long time – downgraded guidance for its full year and Liberum's experts think it is "clear the structural pressures are increasing within the business", particularly in its "US higher education". They give it a sell rating and a price target of 1,050p a share. The shares closed at 1,202p.
Put your easyJet shares in a holding pattern, Investec's analysts advise. They think the airlines' shares have "outpaced the market" and they project a period of "share price stability rather than material growth" There is uncertainty over the outcome of a major new aircraft order this year, and they give the shares a target price of 900p. The shares hovered at 857.5p.Reuse content