A surge in the share price of Associated British Foods (ABF.L) has buoyed the FTSE after the retailer announced earlier-than-expected plans for the launch of its Primark clothing shops in the US.
Associated British Foods was the biggest FTSE 100 riser, adding 250p, or 9.1%, to trade at £29.72, as the UK blue chip index hovered between gains and losses. At 10:23am it was down three points, or 0.1% at 6,679.
Pharmaceutical stocks consolidated strong gains made yesterday on news of deal activity. AstraZeneca (AZN.L) traded 90p, or 2.3%, higher at £40.49 as a report in the Sunday Times that US rival Pfizer had launched a tentative takeover approach continued to boost sentiment towards the stock. Shire (SHP.L) and GlaxoSmithKline (GSK.L) also rose, by 0.9% and 0.4% to £31.74 and £16.46 respectively.
The jump in ABF shares came after the retailer announced a strong set of interim results, with earnings per share rising 10.4% to 45.8p, ahead of expectations.
But it was the announcement of the launch of Primark stores in the US that caught the imagination of the market. ABF said it would open a shop in Boston towards the end of next year, with further stores in the north east of the US planned for 2016.
Panmure Gordon analysts Graham Jones and Damian McNeela labelled the move 'the stand-out news' from ABF's results as they upgraded the stock from 'hold' to 'buy' and upped their target price from £27.60 to £32.10.
They said the US move was 'sooner than we had anticipated, and whilst Primark will continue its measured approach to expansion, in our view this significantly increases the growth potential of Primark'.
Minutes from the Bank of England's monetary policy committee (MPC) did little to move markets, confirming that, as expected, members were unanimous in keeping rates at 0.5% and in their stance on quantitative easing. 'The minutes of the April MPC meeting do little to dilute the view that the second quarter of 2015 is currently the prime candidate for when the Bank of England starts to inch interest rates up,' said Howard Archer, economist at IHS Global Insight.