MARKET REPORT: FTSE falters regardless of UBS name to purchase British shares

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

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

‘The UK is shaking off its ‘sick man of Europe’ label and is now a buy,’ the bank said.

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

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

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

The renewed sense of optimism has helped power a record-breaking run for the stock market in recent days.

But having clocked up record closes six days in a row, the blue-chip index fell 0.2 per cent, or 18.77 points, to 8414.99 yesterday. The FTSE 250 dropped 0.4 per cent, or 85.04 points, to 20560.34.

Despite the slide, there was one blue-chip firm very much catching the attention of City analysts. 

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

Shares rose 2.9 per cent, or 5.25p, to 186.45p, their highest level since late 2021.

The company on Friday posted revenues of £5.5billion for the first three months of the year, up from £5billion from the same period of 2023. 

Profits hit £58million in the quarter – around £50million more than it raked in last year. 

Stock Watch – Jaywing

Shares in a marketing agency backed by former Tory treasurer Lord Ashcroft plunged after it ended its hunt to find a buyer and its chief executive quit.

AIM-listed Jaywing, whose top shareholder is Ashcroft with a 30 per cent stake, began looking for a buyer in March but has decided a sale of the business is ‘not in the interests of stakeholders’.

Boss Andrew Fryatt resigned with immediate effect.

Shares plunged 14.3 per cent, or 0.45p, to 2.7p.

IAG, whose airlines include Iberia and Aer Lingus, said demand for travel ‘remains strong’ as it looks to fly even more passengers this year than last.

Another impressive blue-chip riser was Diploma.

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

Diploma recently bought the US-based firm Peerless Aerospace, which makes nuts, pins and screws for the aerospace industry, for £236million. Shares gained 4.1 per cent, or 158p, to 4060p.

Britain’s biggest defence group BAE Systems headed in the other direction as analysts at Bank of America lowered their rating and predicted the stock’s record run will come to an end.

Shares, which hit an all-time high of 1406.5p on Friday, dropped 3.2 per cent, or 45p, to 1349p.

Defence group Babcock won a 12-year contract to provide maintenance work and support the French government’s fleet of Airbus helicopters. Shares sank 3.4 per cent, or 17.5p, to 504p.

Rakesh Thakrar is leaving his job as chief executive of insurer Phoenix after four years. Shares slid 2.3 per cent, or 12p, to 508.5p.

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

Revenues fell 14 per cent to £139.3m in the six months to the end of March. Profits plunged 92 per cent to £3.3million. Shares held firm, however, rising 1.3 per cent, or 16p, to 1300p.