Lloyds rallies as investors buy into recovery

Lloyds Banks (LLOY) reported its highest full-year profit in a decade on Wednesday, exciting investors.

The shares initially gained 3.6% to 69.2p, helping to push the FTSE 100 higher.

Durex owner Reckitt Benckiser (RB.) and cigarette pusher Imperial Brands (IMB) also advanced by 1.6%.

ECONOMIC GROWTH

The UK economy grew in the last quarter of 2016 as gross domestic product rose from 0.6% to 0.7%, according to the Office for National Statistics.

Between November and December, the service industry expanded by 0.2%, which marked the seventh consecutive month-on-month growth.

West Texas Intermediate and Brent crude oil fell 0.4% to $54 and $56.45 per barrel, respectively.

Gold and copper were stable at $1,237 per ounce and $6,062 per tonne.

In the US, both stock markets closed Tuesday up 0.6% as investor sentiment remained strong.

In Asia, Japan’s Nikkei 225 was flat despite a rally in laptop seller Toshiba’s shares. Shanghai’s SSE Composite and Hong Kong’s Hang Seng fared better and closed higher.

FTSE 100 RISERS AND FALLERS

Britain’s biggest housebuilder Barratt Developments (BDEV) unveiled a 9% rise in first-half pre-tax profit despite building fewer homes. Critics highlighted the potential harm this may do to government efforts to boost housing supply amid a growing crisis, but this was overlooked by investors.

FTSE 250 RISERS AND FALLERS

Recruiter Hays (HAS) remained confident for the rest of its financial year after reporting a 3% rise in first-half net fees, at constant currencies, on growth in Europe and Australia. Performance in the UK and Ireland continued to be challenging.

Public services provider Serco (SRP) failed to deliver to the market as underlying profit fell from £95.9m to £82.1m, which it blamed mainly on discontinued operations. It was the biggest mid-cap faller as shares tumbled by 14%.

Events organiser UBM (UBM) delivered robust full year 2016 results, including a rise in revenue by 12% to £863m.

Addiction treatment business Indivior (INDV) reported operating profit more than halved from $346m in 2015 to $149m after exceptional costs of $238m. Investors ditched the stock, which slumped 10.6% to 330.6p.

SMALL CAP RISERS AND FALLERS

A puzzling $2m share subscription fundraising by security technology firm SerVision (SEV) sparked a 124% share price surge. 14 million subscription shares were snapped up by US investor Cascade at 11.4p per share price, which was nearly fourfold the stock’s 2.76p closing price on Tuesday.

It said the cash will be used to expand sales of the company’s IVG40-N camera security product, particularly in the bus and coach market.

Software provider OneView (ONEV) sealed a multi-million dollar annual cloud-based hosting agreement with Discount Tire Corporation, prompting the stock to rocket by 63%.

Robotic process automation business Blue Prism (PRSM) jumped 7.4% to 480p on confirmation that its revenue will be ‘materially ahead’ of expectations due to new business and upsells to existing clients.

The market anticipated £14.1m revenue for the year but investors can expect those estimates to move higher.

Beowulf Mining (BEM) said it had discussed the next steps in the review process for its Kallak North exploitation concession in Sweden, but was no closer to a decision.

Investors bought into the miner earlier this week as they hoped for approval on the project and marked the stock 15% lower thanks to the lack of clarity.

Story provided by StockMarketWire.com

Merryn

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