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London open: Stocks edge up after record highs on Wall St but Christmas lull setting in
London stocks rose in early trade on Tuesday following record highs on Wall Street on the back of optimism over the tax reform bill, although gains were muted as the Christmas lull began to set in.
On Monday, the Nasdaq, Dow Jones and S&P 500 all notched record highs again as investors grew increasingly hopeful that the US tax reform bill will be passed in the coming days.
CMC Markets analyst Michael Hewson said: “US equity markets continued where they left off last week once again posting new record highs with the Nasdaq pushing above 7,000 for the first time ever, as more and more Republican senators come out and publicly back the US President’s tax reform plans, with many expecting a vote on the plans to take place and be passed later today. Asia markets, with the exception of the Nikkei 225 followed on that US enthusiasm, helped on their way by firmer commodity prices, which have boosted the mining sector.
“This week’s optimism has been fuelled by the fact that two previous critics of the reforms in Marco Rubio and Bob Corker have openly said they will back the plans, after initially saying they were unhappy with some elements of the proposed legislation.”
In corporate news, Old Mutual rallied after it agreed to sell its single strategy business for £600m in a management buyout led by the division’s chief executive Richard Buxton.
Petrofac gushed higher after it completed the migration of the Santuario production enhancement contract into an interest in a production sharing contract.
Indivior nudged up as it entered into an amendment with various lenders to provide replacement term loan facilities in an aggregate principal amount of around $484m, replacing all of its dollar and euro-denominated term loans outstanding under the existing credit agreement.
Acacia Mining advanced after agreeing the sale of a non-core royalty over the Houndé Mine in Burkina Faso for $45m.
GoCompare racked up healthy gains as the price comparison website announced that it has agreed to buy MyVoucherCodes from Monitise for £36.5m in cash and said 2017 operating profit is expected to be at the upper end of market expectations.
On the downside, UDG Healthcare slipped after it announced the appointment of Nigel Clerkin as its chief financial officer, while BHP Billiton ticked down after saying that it is considering leaving the World Coal Association and the US Chamber of Commerce.
Associated British Foods and Saga were both in the red after RBC Capital Markets downgraded its ratings on both stocks to ‘sector perform’.
There are no major UK data releases due.
