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Market report: WPP climbs as ad spending fears ease

Tom Rees
WPP boss Martin Sorrell said 2017 was the advertising sector's worst year in a decade - Keystone

Rising hopes that the advertising industry will rebound this year amid strong global growth boosted WPP and ITV as markets shook off a short-lived bout of inflation jitters.

Investors piled back into the two beleaguered stocks after WPP’s US peer Interpublic said that the ad market would stage a comeback in 2018, just days after rival advertising giants Dentsu and Publicis also reassured shareholders.

WPP boss Sir Martin Sorrell bemoaned what he described as the worst year for the ad industry in a decade in 2017 as top marketing spenders, such as Sky and Unilever, cut budgets to ease pressure on margins, and tech giants continued to transform the industry’s landscape.

Tentative signs of a recovery in the sector lifted WPP 48.5p to £13.84 while the broadcaster ITV climbed 4.8p to 165.4p.

Elsewhere, news that Credit Suisse’s trading revenue is benefiting from the recent return to market volatility boosted London’s banking giants on a read across. Barclays, which has seen its investment banking earnings sink from ultra-low volatility, gained 2.7p to 195.7p while HSBC climbed 15.3p to 750.1p as its second largest shareholder snapped up a stake worth around £270m. Hong Kong-based Ping An Asset Management emerged as a top shareholder in December after tipping over the 5pc disclosure threshold and now holds a 6.2pc stake in HSBC.

Coca-Cola’s European bottling company topped the FTSE 100 after posting “exceptional” results. While City analysts rolled their eyes at management’s over-exuberant back-patting, investors were more convinced, lifting Coca-Cola HBC shares 108p higher to £23.44. Analysts believe that a deal to snap up the soft drinks giant’s African bottling unit is now on the cards following another set of strong figures.

Virgin Money slumped 11.3p to 259.3p after RBC Capital Markets delivered the challenger bank a double downgrade to “underperform”, arguing that its margins will come under increased pressure this year.

Struggling medical products maker ConvaTec, which has tumbled by more than 30pc since a profit warning in October, rallied 10.25p to 197.65p ahead of its full-year results tomorrow. 

Meanwhile, global stocks quickly brushed aside a fresh bout of jitters over resurgent inflation after CPI in the US held at 2.1pc even though economists had forecast prices would cool.

After erasing a 0.7pc gain in minutes when the higher-than-expected figures dropped, the FTSE 100 quickly clawed back into positive territory with market sentiment bolstered by US stocks also shaking off the latest batch of nerves following last week’s sell-off.

The UK’s benchmark index finished 45.96 points higher at 7,213.97 while the DAX in Germany and CAC 40 in France jumped 1.2pc and 1.1pc, respectively. On currency markets, traders dumped the dollar on Valentine’s Day, pushing the pound back above $1.3950.