Johnson Matthey Share News (JMAT)

LONDON (Alliance News) - Stocks in the UK and Europe were posting broad gains midday Friday, rallying into the weekend with auto companies recovering some of their recent losses, while Synergy Health shares soared higher after US's STERIS Corp's acquisition of the company was given the green light by a US court.

The FTSE 100 traded up 2.5% to 6,107.30, the FTSE 250 was up 1.8% at 16,803.46 and the AIM All-Share traded up 0.5% to 732.47.

In Europe, the French CAC 40 was up 3.3% and the DAX 30 was up 2.7%. Carmakers, which had been feeling the effects of the Volkswagen emissions scandal, were trading higher with BMW, Renault, Peugeot and Volkswagen all up midday.

"It will be interesting to see how long this perception of cheap investment opportunity has greater traction than the unlimited liability of regulatory and litigious costs," said IG market analyst Alastair McCaig.

In London, catalytic converter maker Johnson Matthey was the best performer in the FTSE 100, up 5.7%.

Meanwhile, Synergy Health shares were up 43% to 2,257.00 pence, by far the biggest gainer in the FTSE 250, after the US District Court for the Northern District of Ohio denied the Federal Trade Commission's request for a preliminary injunction to block STERIS Corp's takeover of Synergy.

The FTC revealed earlier in the year it intended to block STERIS's proposed USD1.9 billion cash and share takeover of Synergy, as a result of concerns relating to competition in the market for contract radiation sterilisation services. This led the two companies to postpone shareholder meetings to vote on the takeover, and to extend the long stop-date for the completion of the deal.

The acquisition of Synergy by STERIS was agreed in October 2014, at which time its was valued at 1,950p per share.

"At the current STERIS price of USD68.00 (up 8% on the news), the offer is worth 2,379p per Synergy share," said N+1 Singer.

ARM Holdings shares were up 4.2% with major customer Apple is set to report record first weekend sales for the latest in its iPhone series, the iPhone 6S and iPhone 6S Plus, which go on sale Friday. Last year the company breached 10 million in sales of the iPhone 6 and 6 Plus within three days of its launch on September 19, 2014. Apple confirmed early last week it was on track to beat last year's record.

Precious metals miners Randgold Resources, down 1.2%, and Fresnillo, down 0.6%, were two of the three fallers in the FTSE 100 as gold prices were squeezed to an intraday low of USD1,140.71 an ounce.

Glencore, down 1.8% to a new record low of 96.83p, was the other faller in the index, having been one of the best performers in the index earlier in the session.

Quintain Estates and Development traded up 7.0% to 140.75 pence after US private equity house Lone Star increased its takeover offer for the North London property developer to 141 pence per share, valuing the company at around GBP745.0 million.

Quintain had accepted a GBP700.0 million takeover bid from Lone Star at the end of July, and since then the bid deadline has been extended twice as Lone Star worked to secure the required level of acceptances. However, The Times reported Thursday that hedge fund Elliot Capital Advisors had built up a stake in Quintain and was opposing Lone Star's offer.

Ultima Networks was the worst performer in the AIM All-Share, down 51%. The company announced plans to sell all of its operating subsidiaries, raise money via a placing and convert itself into an investing company.

It will sell its IT services business and green technology division, and following the disposals, placing and share reorganisation, it will convert into an investing company focused on making investments in the natural resources sector, and will change its name to Ozima Ventures.

Densitron Technologies was the best performer in the index up 25% at 10.632 pence. Fellow AIM listing Quixant agreed a deal to acquire Densitron Technologies for 11p per share, which values the company at around GBP7.7 million. Quixant, which provides computer systems for the gaming industry, said it expects the acquisition to "significantly" add to earnings in its first full year of ownership. Quixant shares are untraded Friday and were last traded at 140.50p.

In the US, futures were indicating a higher open on Wall Street, with the DJIA up 1.4%, the S&P 500 pointed up 1.3%, and the Nasdaq 100 indicated up 1.1%.

Investors will be reacting to US Federal Reserve Chair Janet Yellen's speech given on Thursday, in which she said she expects the long-anticipated rise in interest rates to begin gradually in December, to avoid an abrupt hike later on.

Speaking at the University of Massachusetts at Amherst, she said her projections were based on her expectation that the labour market and economy continue to improve, and the projection that inflation will gradually move up towards the 2% goal set by the Fed.

"Most [Federal Open Market Committee] participants, including myself, currently anticipate that achieving these conditions will likely entail an initial increase in the federal funds rate later this year, followed by a gradual pace of tightening thereafter," she said. The final scheduled Fed policy statement for 2015 is on December 16.

Hantec Markets analyst Richard Perry said that the fact Yellen felt the need to give rather an explicit message in a speech last night would suggest that perhaps it was felt that her FOMC press conference was a touch too doveish.

"Yellen’s comments seem to have settled a few nerves in the markets and calmed sentiment. The US dollar has subsequently rallied as financial markets now move to improve the probability of a December rate hike. This has helped to stabilize sentiment to a certain extent," Perry said.

Investors will also be looking ahead to the final estimate of second quarter US GDP at 1330 BST. The consensus according to FXStreet is looking for the US Bureau of Economic Analysis to confirm that annualised GDP grew by 3.7%.

Also in the US economic calendar, investors will focus on Markit's services and composite Purchasing Manager's indices, due at 1445 BST.

Federal Reserve Bank of St. Louis President James Bullard participates in a discussion on "New Directions in Monetary Policy" before the Global Interdependence Center in St. Louis at 1445 BST, while Federal Reserve Bank of Kansas City President Esther George speaks on economic conditions and monetary policy before the Aksarben Business Luncheon, Nebraska, at 1825 BST.

By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1

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