Recovery hopes lift British mid-caps; Ibstock shines

© Reuters. FILE PHOTO: The London Stock Exchange Group offices are seen in the City of London, Britain

By Shivani Kumaresan

(Reuters) – British mid-caps tracked a rally in Asian shares on Thursday as hopes of a swift economic recovery this year boosted demand for riskier assets, while building materials maker Ibstock jumped after lifting its profit forecast.

Shares of Ibstock jumped 7.7% to the top of the FTSE 250 after the company said fourth-quarter activity benefited from better-than-expected demand for new houses and repairs.

The domestically focussed added 0.3%, with industrial stocks leading the gains. The blue-chip was unchanged at 0941 GMT, with strength in financial stocks being offset by declines in the energy sector.

In Asia, stocks scaled record highs earlier in the day on hopes that the Biden administration will be able to secure a massive stimulus package to cushion the damage from COVID-19.

“The mood has been positive in equity markets after yesterday’s U.S. inauguration of the new president, particularly given that Biden has very ambitious plans in terms of fiscal policy,” said Simona Gambarini, markets economist at Capital Economics.

Meanwhile, Bank of England Governor Andrew Bailey said he expected Britain’s economy to recover strongly as the country moves vaccinating its population against COVID-19.

“The vaccination programme will allow restrictions to be eased in two months and the economy will bounce back along with pent up demand,” Gambarini said.

Pets at Home Group Plc rose 1.4% after reporting an 18% jump in third-quarter revenue, while trading platform IG Group fell 0.6% after it said it planned to buy online brokerage tastytrade for $1 billion.

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Sports betting and gaming company Entain Plc dropped 1.4%. It named non-executive director Jette Nygaard-Andersen as its top boss, making her the first woman to lead a firm in the UK gambling industry.

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