PARIS (Reuters) - British stocks hit fresh record highs on Wednesday after a two-day holiday break, boosted by a rally in commodity stocks and a 28 percent jump for IWG (IWG.L) after the serviced office provider confirmed a takeover approach.
The approach marks the latest venture by a foreign acquirer into British mid-caps, with deal prices having dropped because of the pound’s depreciation.
A profit warning that prompted a 7 percent share price tumble in October made IWG all the more attractively priced for a potential suitor. The stock was down 18 percent for the year at Friday’s close.
Britain's FTSE 100 .FTSE hit its highest level ever at 7,632.71 points, slightly topping the previous record high hit last week, before paring some gains and ending up 0.37 percent.
The mid cap index .FTMC also surged to a new record high, boosted by IWG's rally. It rose 0.78 percent.
Miners Glencore (GLEN.L), Rio Tinto (RIO.L) and BHP Billiton (BLT.L) delivered the biggest boost to the blue-chip index, rising by 1.4 to 2.1 percent as metals prices hovered near the 3-1/2 year highs they hit on a strong Chinese growth outlook.
Liquidity remained thin as holidays kept investors away from trading desks.
Tullow Oil (TLW.L) gained 2.4 percent as oil prices stayed high, fresh from a rally that sent U.S. West Texas Intermediate crude above $60 for the first time since mid-2015.
Royal Dutch Shell (RDSa.L) gained 0.4 percent, boosted by the higher crude prices and the oil major’s assertion that the recently enacted U.S. tax reform would have a favourable impact on operations.
Shell became the latest in a string of European companies to forecast a beneficial impact from the U.S. tax overhaul, which includes a cut to the corporate tax rate to 21 percent from 35 percent.
Barclays (BARC.L) shares rose 0.3 percent despite the bank saying it expects to take a writedown of about 1 billion pounds ($1.34 billion) on its annual post-tax profit as a result of the tax reform.
Reporting by Helen Reid; additional reporting by Danilo Masoni; Editing by Andrew Bolton