Energy stocks led London’s leading index after fears of a second windfall tax eased.
On her first visit to PMQs, Liz Truss said she was “against” the idea of imposing a tax on energy companies, which could discourage investment. The Prime Minister said: “I think discouraging companies from investing in the UK is wrong.”
Her comments calmed the nerves of investors, many of whom were worried they would use the tax to bolster their energy plans.
Energy Boost: In her first appearance on PMQs, Liz Truss said she was “against” the idea of imposing a tax on energy companies, which could discourage investment
Earlier this year, the government introduced a 25 percent windfall tax on oil and gas producers.
As a result of Truss’s pledge, SSE shares rose 3.9 percent, or 66.5 pence, to 1753.5 pence and UK gas owner Centrica rose 2 percent, or 1.6 pence, to 83.54 pence.
Among mid-caps, Drax was up 6 percent, or 39 pence, to 691 pence and Energean was up 0.08 percent, or 1 pence, to 1245 pence.
But despite the recovery rally in energy stocks, markets came under renewed pressure after Tuesday’s rally.
The FTSE 100 fell 0.9 percent or 62.61 points to 7237.83 and the FTSE 250 lost 0.05 percent or 9.36 points to 18811.48.
As the pound slipped against the dollar, caution swept through London markets.
Growing unease and worries about a possible recession saw retailers pull back from their previous rise, with Primark-owner Associated British Foods down 3.6 per cent or 54.5 pence to 1455 pence and Next down 2.3 per cent or 140p fell to 6048p after JP Morgan cut its price target to 6000p from 7280p.
Stock Clock – GYG
GYG shares shot up on the last day of trading.
In August, the Spain-based superyacht paint, service and supply company announced plans to withdraw from AIM, citing “valuation volatility” and listing costs.
It operates as a limited company trading under the name GYG Ltd. newly registered.
The company had done well after its 100p float in 2017, valued at £46.6million, but business has been impacted by the pandemic.
Shares rose 20 per cent, or 5p, to 30p yesterday.
Ocado shares slipped 0.1 percent, or 1 pence, to 733.8 pence, despite Hannah Gibson being appointed to take over its retail arm following Mel Smith’s resignation last month.
Gibson, head of its technology business at the online grocer, is taking over this month at Ocado Retail, its joint venture with Marks & Spencer (down 5.9 percent or 7.65 pence to 122 pence).
Ocado Retail was formed in 2019 when M&S bought 50 per cent of its online shopping division for £750m and the partnership will allow shoppers to buy M&S products through the Ocado website.
Just days after a cyberattack disrupted bookings on its websites and apps, IHG received a boost from analysts.
The Holiday Inn and Crowne Plaza owner was praised by Deutsche Bank for his “robust business model” and “healthy balance sheet.”
The broker said he believes the resilience of the US market will help the hotel chain owner outperform despite the looming recession.
Deutsche Bank kept its buy rating but lowered the stock’s price target to 5520 pence from 5700 pence as IHG stock rose 0.7 percent, or 34 pence, to 4618 pence.
In the second row, NCC Group was up 10.6 per cent, or 21 pence, to 219 pence, on a backdrop of a US private equity firm orbiting tech firm GB Group, which was up 24 per cent, or 125 pence, to 647 pence rose.
NCC, which operates in the same space as GB Group, was also traded as a takeover target. US private equity sharks have been circling British tech companies since the turn of the year, boosted by the weak pound.
Analysts say many UK investors don’t understand tech companies, leaving them grossly undervalued.
In Adland, M&C Saatchi revealed it has spent £8.4million over the past six months fending off two takeover bids.
The advertising giant rejected plans to take over the communications group Next Fifteen and the investment vehicle AdvancedAdvT from Vin Murria.
In the half-year results, profit for the six months to 30 June fell to £300,000 from £4.8m in the same period last year.
M&C Saatchi shares fell 4.8 percent, or 7.8 pence, to 154.4 pence.
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