Insurance stocks lead gains in London, Direct Line jumps

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Insurance stocks lead gains in London, Direct Line jumps

stock :: 2024-11-28 :: source - reuters

By Reuters

LSEG signage is seen on screens in the lobby of the London Stock Exchange in London, Britain, May 14, 2024. REUTERS/Hannah McKay/File Photo Purchase Licensing Rights

Summary

FTSE 100 up 0.1%, FTSE 250 up 0.7%
Renewi jumps on $887 million takeover bid by Australia's Macquarie
Energean tops FTSE mid-cap losses on production forecast cut
UK budget shows govt doesn't understand business - retail veteran

Nov 28 (Reuters) - UK's domestically-focused mid-cap FTSE 250 hit an over two-week high on Thursday, while the main FTSE stock index inched up in light trading volumes, with Direct Line boosting the insurance sector after rejecting Aviva's $4.16 billion takeover bid.

The FTSE 100 (.FTSE) was up 0.1% as of 1058 GMT, while the FTSE 250 (.FTMC) climbed 0.7%. The Thanksgiving holiday in the U.S. is expected to keep trading volumes light throughout the day.

Insurance stocks (.FTNMX303020) jumped 6.2%, on track for their biggest one-day gain in four years, with Direct Line Insurance (DLGD.L) jumping 42% after rejecting Aviva's AV.L bid, saying it "substantially undervalued" the company. Aviva's shares fell 3%.

Spirax-Sarco Engineering (SPX.L) rose 3% on positive rating actions by two brokerages on the valve-maker's stocks, while Sainsbury (SBRY.L) rose 2.7% after J.P.Morgan upgraded the supermarket's shares to "overweight" from "underweight".

Among major movers, Renewi (RWI.L) soared 45% after asset manager Macquarie's (MQG.AX) preliminary takeover deal of the waste management firm for 700.9 million pounds ($887.8 million).

Dr Martens (DOCS.L) climbed 13%, with a brokerage attributing the gain to the bootmaker's better-than-expected first-half results.

On the flip side, Energean (ENOG.L) dropped 6% to the bottom of the FTMC index after the gas producer lowered its full-year production forecast.

Meanwhile, one of the country's most experienced retail veterans said Britain's tax raising budget shows the government does not understand business. Finance Minister Rachel Reeves' Oct. 30 budget has been criticised by businesses after she tapped companies for an additional 25 billion pounds of taxes a year to rebuild public services.

Additionally, business sentiment in Britain's services sector is falling at the fastest rate in two years, partly as a result of tax rises in Reeves' first budget.

While Wednesday's strong U.S. inflation data raised concerns about a cautious stance on U.S. rate cuts, traders expect the Bank of England to hold borrowing costs amid concerns about inflation rising again.

($1 = 0.7895 pounds)

Reporting by Ankika Biswas in Bengaluru; Editing by Sonia Cheema