Home Money MARKET REPORT: FTSE falters despite UBS call to buy British shares

MARKET REPORT: FTSE falters despite UBS call to buy British shares

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In a major vote of confidence in the UK, UBS advised its clients to buy shares in companies listed in London

One of the world’s biggest banks said yesterday that now is the time to buy British shares, even as the FTSE 100’s breakneck rally came to an end.

In a major vote of confidence in the UK, UBS advised its clients to buy shares in companies listed in London.

“The UK is shedding the ‘sick man of Europe’ label and is now a buying option,” the bank said.

The comments follow better-than-expected economic growth figures last week and hopes that interest rate cuts are on the way.

The chances of a rate cut in June are now 50%, according to bets in financial markets.

In a major vote of confidence in the UK, UBS advised its clients to buy shares in companies listed in London

The renewed sense of optimism has helped fuel a record run in the stock market in recent days.

But after posting record closes six days in a row, the blue-chip index fell 0.2 percent, or 18.77 points, to 8,414.99 yesterday. The FTSE 250 fell 0.4 per cent, or 85.04 points, to 20,560.34.

Despite the fall, there was one blue-chip company that attracted a lot of attention from City analysts.

British Airways owner IAG took to the skies after Barclays, Morgan Stanley, Peel Hunt, RBC and Bernstein all upgraded their shares.

The shares rose 2.9 per cent, or 5.25 pence, to 186.45 pence, their highest level since late 2021.

On Friday, the company posted revenue of £5.5 billion for the first three months of the year, up from £5 billion in the same period in 2023.

Profits hit £58m in the quarter, around £50m more than it took in last year.

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Stock Watch – Jaywing

1715720021 901 MARKET REPORT FTSE falters despite UBS call to buy British

Shares in a marketing agency backed by former Conservative treasurer Lord Ashcroft have plummeted after its search for a buyer ended and its chief executive resigned.

AIM-listed Jaywing, whose main shareholder is Ashcroft with a 30 per cent stake, began looking for a buyer in March but decided that selling the business was “not in the interests of interested parties”.

Boss Andrew Fryatt has resigned with immediate effect.

The shares fell 14.3 per cent, or 0.45p, to 2.7p.

IAG, whose airlines include Iberia and Aer Lingus, said travel demand “remains strong” as it expects to carry even more passengers this year than last.

Another impressive top-of-the-line promotion was Diploma.

The industrial components distributor raised its annual revenue forecast after sales rose 10 per cent to £638.3 million in the first half to the end of March. The group expects its revenue to rise by around 16 per cent, including 10 per cent due to acquisitions, in the year to September 30.

Diploma recently bought US firm Peerless Aerospace, which makes nuts, pins and screws for the aerospace industry, for £236 million. The shares gained 4.1 per cent, or 158 pence, to 4,060 pence.

Britain’s largest defense group, BAE Systems, went in the opposite direction as Bank of America analysts downgraded their rating and predicted the stock’s record run will come to an end.

The shares, which hit a record high of 1,406.5p on Friday, fell 3.2 per cent, or 45p, to 1,349p.

Advocacy group Babcock has won a 12-year contract to carry out maintenance work and support the French government’s Airbus helicopter fleet. The shares sank 3.4 per cent, or 17.5p, to 504p.

Rakesh Thakrar steps down as CEO of insurer Phoenix after four years. The shares fell 2.3 per cent, or 12p, to 508.5p.

Polymer maker Victrex suffered a difficult first half as its medical device customers overstocked and tried to buy fewer items.

Revenue fell 14 per cent to £139.3m in the six months to the end of March. Profits fell 92 per cent to £3.3 million. However, the shares held firm and rose 1.3 per cent, or 16p, to 1,300p.

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