FTSE hits record in Santa rally as Shell makes deal

The FTSE 100 hit a new record, closing 1% higher above the 7,600 mark on the penultimate trading day before the Christmas holidays.

Oil colossus Royal Dutch Shell (RDSB) agreed to buy energy supplier First Utility according to media reports, causing the shares to surge 1.5% to £24.70.

As Shell is among the largest blue-chip in terms of market cap, the gains helped the FTSE 100.

Other noticeable risers were tobacco firm British American Tobacco (BATS), Nurofen owner Reckitt Benckiser (RB.) and BP (BP.), which enjoyed an uplift of up to 2.1% apiece.

Brent crude oil was flat at $64.56 per barrel. Copper was up 0.5% at $3.19 per pound and gold was stable at $1,265 per ounce.

OVERSEAS MARKETS

In the US, the economy grew slightly slower at 3.2% instead of the previous estimate of 3.3% according to the Department of Commerce and the tax cuts were finally passed, helping to boost investor sentiment.

The Dow Jones rose 0.4% to 24,836 around 4:45pm UK time.

MID AND LARGE CAP RISERS AND FALLERS

According to media reports, budget airline Ryanair (RYA) agreed to recognise Irish trade union Impact in writing to avoid strike action. The move did not affect the share price as the airline previously agreed to recognise pilot unions last week.

Investors checked into Holiday Inn owner InterContinental Hotels (IHG) after it confirmed the new US tax bill will reduce the company's tax rate by mid to high single digit percentage points in 2018. The stock rose 2.1% to £47.03.

Infrastructure firm Balfour Beatty (BBY) hiked its 2017 pre-tax profit forecast after agreeing to sell a 12.5% stake in M25 orbital motorway operator Connect Plus to Dalmore Capital for £103m. Its shares strengthened 2% to 287.4p.

Retirement housebuilder McCarthy & Stone (MCS) struggled following the government's ground rent proposal. CEO Clive Fenton said the approach would result in 'reduced housing delivery' as shares in the FTSE 250 constituent fell 9.5% to 153.6p.

Concerns over the outlook for Christmas trading loomed over homewares retailer Dunelm (DNLM) as the appointment of former Evans Cycles boss Nick Wilkinson as CEO failed to boost the shares. Dunelm retreated 1.3% to 684.8p.

A new contract with Transport for London (TfL) did not excite Capita's (CPI) investors, as the shares dipped 2.8% to 394.5p. The professional services company said the five year contract was for the ongoing management of TfL's access and wide area network.

SMALL CAP RISERS AND FALLERS

Video games developer Sumo (SUMO) levelled up on its first day of trading on AIM. Its shares were up approximately 14% to 114p after raising £38.45m of funding to pay down debt and for working capital.

On AIM, Civitas Social Housing (CSH) increased 2.3% to 112.7p despite acquiring a portfolio of East Midlands-based specialist supported living properties, which will immediately boost income.

Elsewhere, CityFibre Infrastructure (CITY) revealed its biggest public sector deal yet, signing a £15.6m agreement with telecoms provider Commsworld for Glasgow City Council. Investors took the news in its stride as the shares were static at 57.5p.

Corero Network Security (CNS) warned full year sales will be hit by delays in customer implementation schedules, with the majority of sales on two big projects expected in the first half of 2018. The stock retreated 0.7% to 6.9p.

Conroy Gold and Natural Resources (CGNR) announced it would raise £1m to commercialise its business interests and an active ground exploration programme, triggering a 111.7% rally to 27p.