London equities made strong gains on Friday,as fresh bid activity energerised the mining sector and Wall Street futures took off after Microsoft made an offer for Yahoo.
The FTSE 100 was 2 per cent higher at 5,999.0, a rise of 119 points. The index came off session highs, which took it briefly backover the 6,000 mark, after worse-than-expected US job creation data, but remained positive due to the spell of dealmaking .
Rio Tinto rose 9 per cent to £54.20 after Chalco of China joined forces with US aluminium smelter Alcoa and took a 12 per cent stake in the miner ahead of the February 6 deadline for a full bid from peer BHP Billiton (NYSE:BHP).
The new consortium, called Shining Prospect, is reported to have paid £60 per share for the stake, above Rio's year-high of £59.30.
It said it did not intend to make a full offer for Rio at the moment, but reserved the right to do so in future. It also said it could participate in another bid for the company.
That helped shares in Rio's existing suitor BHP Billiton to a 7.7 per cent rise at £15.91. BHP has until next Wednesday to lodge an offer for Rio after its initial overtures were rebuffed by Rio's board.
The news, discussed in detail on FT Alphaville's Markets Live, re-stoked hopes for a round of consolidation in the heavily-weighted sector and sent its constituents racing higher.
Anglo American was 7 per cent stronger at £29.44 and Antofagasta rose 4.6 per cent to 682½p. Kazakhmys made gains of 4.5 per cent to £12.70 and Vedanta Resources put on 3.2 per cent to £18.58. Xstrata was 1.3 per cent stronger at £38.77. Lonmin was 2.7 per cent ahead at £29.69.
Fund management stocks recovered in line with the improved conditions on world equities markets. Schroders was 2.4 per cent higher at £10.00 and Man Group was 1.2 per cent stronger at 553p.
New York equities were called sharply higher after news broke of Microsoft's $44.6bn bid for Yahoo, the internet search engine.
Microsoft valued its unsolicited offer at $31 per share in cash or stock, a 63 per cent premium based on Yahoo's closing price on Thursday. Shares in Yahoo surged 58.5 per cent to $20.10 in pre-market trade.
The news provided an immediate boost for Wall Street futures, which turned around to predict an opening rise of 133 points on the Dow Jones Industrial Average to 12,747 points. The tech-heavy Nasdaq Composite index was called 27 points higher at 1,875.
Closely-watched US employment data showed a lower number of jobs in the US in January compared with December. Non-farm payrolls showed the number of jobs fell by 17,000, much worse than expectations of an 80,000 increase in the number of jobs created outside the agricultural sector.
Stocks directly exposed to US markets moved higher on hopes that the Federal Reserve's latest rate cut would help steer the world's biggest economy away from recession.
Housebuilder Taylor Wimpey rose 7.3 per cent to 192.4p, heating and plumbing goods supplier Wolseley (NYSE:WOS) rose 4.5 per cent to 716½p and credit checker Experian put on 2.7 per cent to 452.3p.
No comments:
Post a Comment