Tuesday’s Master Investor Market Report

– The FTSE 100 closed the day at 6,686.57, a decrease of 2.05 points.
– The FTSE 250 climbed 64.32 points to finish at 17,734.43.
– The FTSE All Share rose by 1.61 points to 3,650.75.
– The FTSE AIM All Share finished at 755.09, a rise of 3.48 points.

London shares put in a flat performance as traders attempted to digest mixed economic data amidst another day of heavy reporting from UK corporates. Nationwide said UK house prices rose 3.5% year-on-year in July, as expected, accelerating from the previous month’s 3.3% gain. However, the UK construction PMI came in lower than expectations at 57.1.

Smiths (SMIN) shares rallied 52.5p to 1,201.5p as it emerged that US activist hedge fund ValueAct is a shareholder, with a stake of less than 5%, which is less than the threshold requiring public disclosure. Investors were clearly hoping that the news would presage further involvement with the company, as Smiths Group has long been the subject of repeated break-up rumours. It also follows recent news that ValueAct has become the largest shareholder in Rolls-Royce.

Specialty pharmaceuticals firm Shire (SHP) launched a $30 billion all-share bid for US rival Baxalta, which was promptly rebuffed by the latter’s board. Shire argued the combination, which would have given Baxalta shareholders approximately 37% of the enlarged group, would generate immediate shareholder value and accelerate the growth plans of both companies. Shire shares tumbled 335p to 5,395p on the news.

Shares in aerospace & defence contractor Meggitt (MGGT) soared 36.8p to 501p on the back of a 6% rise in underlying first-half pre-tax profit, to £152 million, as stronger-than-expected military revenue offset challenging conditions in the energy market. The group added that it remains confident of achieving low- to mid-single digit organic revenue growth for the full-year, and announced two contract wins – one with the British Army and one with Lockheed Martin.

Shares in insurer Standard Life (SL.) slipped 14.8p to 439.7p despite a 7.5% rise in the interim dividend, as several one-off charges dragged reported pre-tax profit 64% lower to £69 million in the first half. On the plus side, the group lifted funds under management (FUM) by 2% to £302.1 billion since the year end, but analysts at Shore Capital said the share price looked “up with events”.

Builders’ merchant Travis Perkins (TPK) said profit before tax climbed 3.1% to £167 million in the six months to 30th June, while like-for-like sales were down 2.9%. The results came in the face of continued weakness in the plumbing and heating market, although sales growth accelerated in the second quarter and the dividend was lifted by 20%, reflecting management’s confidence. Nevertheless, shares in the firm slipped 45.5p to 2,214.5p today.

Online takeaway app Just Eat (JE.) served up a 63% increase in first-half pre-tax profit, to £14 million, as active user numbers climbed, and said it now expects revenue for the year to be higher than previously thought. Orders were up 49% to 30.7 million and the number of active users was up 59% to 11 million. Just Eat shares moved 14.8p lower to 423p.

Shares in troubled diagnostics company Immunodiagnostic Systems Holdings (IDH) fell a further 20p to 270p after a difficult start to the year. Revenues in the first quarter slumped 15%, with underlining revenues down 21% when excluding the September 2014 acquisition Diametra. Chairman Burkhard Wittek said that activities to increase sales resources devoted to the manual assays business were being established, with a plan to combine the manual assay programs of IDS and Diametra into an enlarged, more attractive catalogue.

Tomorrow’s news today

BBA Aviation (BBA), Ferrexpo (FXPO), Legal & General (LGEN), London Stock Exchanget (LSE), Novae (NVA), and Soco International (SIA) are among the firms that will publish interim results tomorrow.

On the economic front, we are expecting Services PMI data from the UK, and a raft of PMI data from Europe and the US.

Quote of the day

“If you’re in the luckiest one per cent of humanity, you owe it to the rest of humanity to think about the other 99 per cent.”
– Warren Buffett