The distribution group was chased higher after announcing three acquisitions.
Investors applauded a string of deals by blue-chip distribution group Bunzl , which revealed a rash of acquisitions that encouraged traders to snap up shares in the company.
Bunzl (LSE: BNZL.L - news) unveiled three purchases, one in South America and a further two in the US. The acquisitions included a packaging group in California and Vicsa Safety in Chile, which provides personal safety equipment such as hard-hats for building-site workers and has operations in Argentina, Colombia and Mexico and Peru.
Vicsa marks the Bunzl’s first purchase in South America outside Brazil, where the it has bought five companies, including Vicsa’s Brazilian business, a purchase that was also announced yesterday. Bunzl has now made 40 acquisitions over the past five years and is looking for more in 2013.
The deals spurred Numis into upgrading its expectations for Bunzl, with analyst Mike Murphy lifting his forecast for 2013 pre-tax profit to £342m from £328m and raising his earnings-per-share forecast to 75.4p from 72.3p. Mr Murphy also boosted his recommendation to “buy” from “hold”.
Investors liked Bunzl’s news too, sending the shares up 34p to £10.49, one of the biggest risers on the benchmark index.
A compromise deal on the US fiscal cliff - spending cuts and tax rises that had threatened to send the country back into recession - has seen shares around the world climb as investors look to take on riskier assets.
That rally has spurred the FTSE 100 to its highest since May 2008, while the FTSE 250 yesterday stood at a record high.
Strategists at Societe Generale (Paris: FR0000130809 - news) reckoned investors’ appetite for greater risk is likely to continue, with safe-haven assets such as government bonds expected to suffer this year.
Back in London, the diverging fortunes of British retailers over the festive period were apparent from a quick glance at the leaders and laggards. Marks & Spencer , which reported a 1.8pc decline in UK like-for-like sales in the 13 weeks ending December 29 saw its shares fall as much as 19.4 before closing 2.2 lower at 368.8p on further consideration of its numbers.
However, among the biggest risers on the blue-chip index was Tesco (LSE: TSCO.L - news) , after the supermarket group posted a 1.8pc rise in like-for-likes in the UK during the six weeks to January 5. The retailer put on 6¼ to 355.4p.
Sitting pretty at the top of the main board was chip designer and Apple supplier ARM Holdings (LSE: ARM.L - news) , helped higher by strong fourth-quarter numbers from German peer Dialog Semiconductor (Xetra: 927200 - news) . One dealer said the Consumer Electronics Show in Las Vegas, the industry’s blue riband event, was focusing attention on ARM. Talk of a cheaper iPhone also helped the shares rise 36½ to 863½p.
The two companies that joined the FTSE 100 in September’s quarterly index review were in demand.
Analysts at Citigroup (NYSE: C - news) were making the case for engineering buy-out group Melrose , arguing the company “at its core remains a management story and we think the strategy and current mix should drive the business going forward, with the increasing likelihood of potential disposals presenting further upside”.
They lifted their recommendation to “buy” from “neutral” and the shares rose 6.6 to 241.1p.
John Wood Group , the other company promoted to the main board in the autumn, added 20½ to 794½p on an upgrade to “buy” from hold” at Deutsche Bank. Stock-pickers at the bank said the operational headwinds facing the group were abating.
Meanwhile, shares in United Utilities (LSE: UU.L - news) and Severn Trent (NasdaqCM: STRN - news) bubbled higher on the decision by the Office for National Statistics to retain the current method for calculating the UK Retail Price Index.
Revenues at regulated utilities are linked to RPI, and alterations to the formula would have lowered the measure of inflation.
Shares in United Utilities rose 5½ to 692½p, and Severn Trent ended the session 8p higher at £15.86.
Elsewhere on the blue-chip index, inspection and testing company Intertek was hit by a rating downgrade at Jefferies, which opted to cut the group to “underperform” from “hold”. The shares retreated 60p to £31.00.
Also among the fallers was energy exploration group Tullow Oil (LSE: TLW.L - news) , down 18p at £12.25 ahead of its trading update today. Although retaining their “overweight” rating, analysts at JP Morgan Cazenove trimmed their price target to £15.30 from £17.00.
On the mid-cap index, building materials distributor SIG (LSE: SHI.L - news) topped the table with a rise of 8 to 135p. Investors snapped up the shares after the company said it was “confident” underlying pre-tax profit for 2012 would not come in below £82m.
Set (KOSDAQ: 027040.KQ - news) -top box maker Pace (Other OTC: PCMXF - news) added 8 to 200.8p after the group revealed full-year revenues would beat its previous guidance. But online gambling group bwin.party , which confirmed that trading since the end of September was in line with the company’s expectations, dipped 1.3 to 110.2p. Investec (LSE: INVP.L - news) analyst James Hollins noted continuing regulatory uncertainty in Germany, bwin’s biggest market.
Lower down the scale, speculation that cancer drug developer Sareum would soon announce a licensing deal pushed shares in the small-capper up ¼ to 1.925p.