Diageo shares today surged after the drinks giant named former Tesco boss Dave Lewis as its new chief executive.
Meanwhile, the FTSE 100 index is trading higher after risk appetite was boosted by hopes of an end to the 40-day US government shutdown.
On the corporate front, private equity giant Permira secured backing for a £2.3 billion takeover of FTSE 250-listed JTC.
Market update: FTSE 100 up 0.8% as risk appetite returns, Diageo surges 7%
10:09 , Graeme EvansThe FTSE 100 index today was today back near record territory after hopes for an end to the longest US government shutdown in history boosted risk appetite.
The weekend’s Senate deal lifted US benchmarks after last week’s heavy selling, with S&P 500 index futures up 1% and the Nasdaq Composite set for a 1.5% rebound.
Asia and European markets rallied as the FTSE 100 index lifted 0.8% or 76.72 points to 9759.29. This compares with Wednesday's record close of 9777 and the intraday high of 9787.
Struggling Diageo shares led the top flight after the Guinness and Smirnoff drinks giant named former Tesco boss Dave Lewis as its new chief executive.
Dan Coatsworth, AJ Bell’s head of markets, said: “Dave Lewis is ‘Mr Fixit’ as far as the market is concerned, joining the grocer with no retail experience and putting it back on track after a difficult period.”
Shares are down 40% over the past two years but rallied 7% or 124.5p to 1851p on the back of the leadership change.
Coatsworth added: “The stock is unloved after several years of disappointment and the appointment of a highly respected CEO could be enough to win over many investors. However, Lewis knows he will ultimately be judged on results, not hope.”
The FTSE 100 risers board also featured a return to form for the miners Fresnillo and Endeavour Mining after the prices of gold and silver added 2%.
The shares rose 5% or 102p to 2294p and 3% or 100p to 3108p respectively.
The prospect of a strong session for the Nasdaq benefited the tech industry-focused trusts Polar Capital and Scottish Mortgage as their shares rose 3%.
Among the other risers, the shares of British Airways owner IAG rebounded from Friday’s results-day slide following a gain of 3% or 9.6p to 375.8p.
Defensive stocks were out of favour as Sainsbury’s retreated 5.2p to 344p and Severn Trent lost 27p to 2792p.
In the FTSE 250, JTC fell 5% or 70p to 1288p after the board of the financial services firm backed Permira’s £2.3 billion takeover proposal at a price of 1340p.
The deal comes after the specialist in fund, corporate and private client services rceived four bid proposals from Permira and three from Warburg Pincus.
The deal price of 1340p a share is a 49.4% premium to the 897p seen in August, prior to Permira’s first offer. It is also 18.2% higher than JTC”s all-time high price of 1134p, which was set in September 2024.
Week ahead: GDP figures and blue-chip updates in focus
08:50 , Graeme EvansThe week ahead includes tomorrow’s release of unemployment and wage figures, followed by the first estimate of UK GDP on Thursday.
Bank of America expects the jobless rate to edge up 4.9%, with GDP set to show 0.2% quarter-on-quarter expansion following a flat monthly performance in September.
Vodafone’s half-year results on Tuesday will show whether its turnaround plan is gaining traction after the mobile phone giant’s struggles in Germany.
Thursday’s diary includes half-year results by Burberry, Aviva’s third quarter figures and a trading update by Rolls-Royce.
Hargreaves Lansdown analyst Matt Britzman said: “Execution risk looms for Vodafone, while Aviva and Rolls-Royce face high expectations - making this a key week for gauging resilience among UK blue chips.”
Diageo surges in stronger FTSE 100, IAG up 4%
08:10 , Graeme EvansThe FTSE 100 index today moved within 50 points of its record high after risk appetite was boosted by hopes for an end to the US government shutdown.
London’s top flight rose 0.6% or 60.38 points to 9742.95, with Diageo shares up 7% following the appointment of Dave Lewis as chief executive.
The drinks giant, which has lost 40% of its value over the past two years, rose 125.4p to 1851.9p.
Richard Hunter, head of markets at Interactive Investor, said: “The announcement is clearly being seen as a potential inflection point for the group given the new hire’s proven ability in brand building, and where the shares have been under some considerable pressure of late, having fallen by 28% so far this year.
“The news may prompt investors to reconsider the strength of Diageo’s premier brand portfolio.”
Elsewhere in the FTSE 100, IAG shares recovered from Friday’s results-day slide by rallying 4% or 15.9p to 382.1p.
FTSE 250-listed JTC fell 4% or 58p to 1300p after the board of the financial services firm backed Permira’s £2.3 billion takeover proposal at a price of 1340p.
JTC backs private equity takeover deal
07:35 , Graeme EvansThe board of FTSE 250-listed professional services business JTC today backed a £2.3 billion takeover by the private equity group Permira.
The deal comes after the specialist in fund, corporate and private client services received four bid proposals from Permira and three from Warburg Pincus.
The price of 1340p a share is a 49.4% premium to the 897p seen in August, prior to Permira’s first offer. It is also 18.2% above JTCs all-time high price of 1134p, which was set in September 2024.
JTC, which listed on the stock market in March 2018, employs over 2,300 people and generated revenues of £305.4 million in 2024.
Diageo appoints new CEO
07:10 , Graeme EvansDrinks giant Diageo today appointed former Tesco boss Dave Lewis as its new chief executive.
He served as the supermarket’s chief executive from 2014 to 2020, having previously spent nearly three decades at Unilever.
The Guinness and Johnnie Walker firm said: “Dave is a proven CEO with extensive marketing and brand building experience.
“He has an outstanding track record leading global consumer businesses, growing world-class brands, and providing operational and financial rigour.”
Nik Jhangiani will continue as interim chief executive until the end of December before resuming his chief financial officer role.
Diageo shares have fallen 40% in the past two years.
Sir Dave, who was knighted in 2021, will be paid an annual salary of £1.5 million, plus £210,000 in pension contributions, as well as performance-based bonuses.
He will step down as chair of consumer healthcare business Haleon.
FTSE 100 seen higher, US markets set for a positive session
07:03 , Graeme EvansWall Street is set for a stronger session after risk appetite was boosted by hopes for an end to the US government shutdown.
Futures trading points to a 0.7% rise for the S&P 500 index as leading US benchmarks put back some of the ground lost during last week’s tech sector jitters.
On Friday, the Dow Jones Industrial Average rose 0.2% and the S&P 500 edged 0.1% higher but the Nasdaq Composite ended down 0.2%.
The FTSE 100 index lost 0.4% across last week, including a fall of 53 points or 0.6% on Friday after weak performances by Rightmove and airlines group IAG.
London’s top flight is seen rising by 0.8% at today’s opening bell. Asia markets have also rallied, with the Nikkei 225 up by 1.3% and the Hang Seng index 1.5% higher.
