Media stocks were buoying the mood today as the London market made a positive start to the week.
The sector occupied a handful of the top spots on the FTSE 100 Index risers board after a host of broker upgrades, helping the index close 13.5 points higher at 4558.5.
This mirrored the situation across the Atlantic, where the Dow Jones Industrial Average was around 20 points higher by late afternoon in London.
The upbeat mood came despite official data showing factory gate prices rising at the fastest rate in nine years last month, sparking fears of inflationary pressures.
One expert said he believed the Footsie was on the up and could move nearer to 5000 in the coming months.
Media groups benefiting from the upbeat mood in the sector included Reuters, which was the top riser after gaining nearly 4% or 13p to 348.5p. ITV benefited from the positive stance of analysts at Smith Barney, lifting 3.75p to 106.75p.
Magazine publisher Emap moved 17p ahead to 791.5p after broker UBS lifted its target price, while FT owner Pearson advanced 14p to 637.5p.
But despite advertising giant WPP’s early gains after agreeing terms to buy US-based agency Grey Global, worth £1.31 billion US dollars (£730 million), it ended the session 6p lower at 508p.
Analysts said the price was at the top end of expectations, but benefits included new clients such as Procter & Gamble and greater access to the faster-growing markets of Asia and Latin America.
Pharmaceuticals companies were in focus as AstraZeneca suffered in the wake of last week’s vote by the advisory committee of the US Food and Drug Administration against approval of one of its key drugs.
The stock lost more than 4% of its value – off 110p to 2340p – after the panel cited concerns that Exanta could cause liver failure in patients over the long term.
Rival Shire Pharmaceuticals was also in the doldrums, weakening 2.5p to 508p, but GlaxoSmithKline made progress, up 19p to 1166p.
BAE Systems made headway after acquiring a leading IT supplier to the Pentagon. The aerospace and defence group saw its stock add 3.5p to 219p after agreeing a 600 million US dollars (£334 million) deal for DigitalNet Holdings.
Supermarket giant Morrisons was also in the black – up 4p to 197.5p – after rival Asda agreed a deal to buy four of its Safeway stores.
But profit-takers moved in on Sainsbury’s after last week’s strong gains on the back of speculation of an imminent takeover bid. The supermarket chain stood 3.75p lower at 279.25p.
Outside the top flight, telecoms group Colt rose 10%, 4.5p to 49.25p, after its new chief executive unveiled an overhaul aimed at reviving the company’s fortunes.
The biggest risers in the Footsie today were Reuters up 13p to 348.5p, ITV adding 3.75p to 106.75p, Compass up 8.25p to 238.75p and Scottish & Newcastle adding 11.5p to 399.5p.
The heaviest fallers were AstraZeneca down 110p to 2340p, Gallaher off 12p to 631p, Schroders NV down 11p to 586.5p and Abbey National off 10.75p to 608.25p.