The UK 100 winners and losers this week offer a perfect opportunity to discuss several things which can drive significant share price moves. From M&A, which I talked about last week, to company results and read-across, from management and investor comments to the latest broker opinions and regulatory responses, all have potential to send shares higher or lower. Sometimes this can result in breakouts, sometimes breakdowns, helping bulls and bears respectively. Key, though is being in the know quick sharp, in a position to capitalise on the investment or trading opportunity that presents itself.

Ticking several of the boxes (M&A, investor comments, broker opinion) is London Stock Exchange (LSE), +7.6% to £40 this week, just shy of record highs, after activist investor TCI (5.1% shareholder) said it expects a £15bn/£44 per share bid from a US rival will eventually be made, helping the shares break above September falling highs resistance at 3800p. The next day, broker Berenberg started coverage of LSE with a Buy rating and 4690p target saying it can benefit from structural growth trends, deserves a premium valuation and downplaying takeover talk with cross-border sector M&A having been rare.

Staying with M&A and adding in regulators, Sky, +4.7% to 1050p this week, trades its best since 31% owner Fox (itself being acquired by Disney) first approached the UK satellite broadcaster about taking control in December 2016, trying to finish something Murdoch failed to do in 2011, scuppered by the UK phone-hacking scandal. Despite the UK’s anti-trust Competition & Markets Authority (CMA) saying the deal was not in the public’s interest, investors clearly see potential for it to succeed, likely through bowing to demands to either (1) Spin-off Sky news or (2) insulate Sky New from Murdoch influence.

Budget airline easyJet (+6.7%) flies 2yr highs after strong Q1 results and management offering a bullish outlook. Retail fared better this week, regaining some lost ground following a very mixed batch of trading updates. Next (+6.6%; back above £50) is being re-embraced by investors as the home and fashion name that performer best around Christmas. B&Q and Screwfix owner Kingfisher (+5.7%) is closing last May’s gap down thanks to the consumer sentiment read-across from a Pets at Home trading update.

Barclays (+5.1%), is being seen by brokers as the most global of the UK banks and thus likely to profit from higher interest rates and economic growth.  ITV (+4.6%) is likely benefiting from Sky’s M&A inspired climb while Asia-focused bank Standard Chartered (+4.0%) was preferred over peer HSBC by market moving broker Goldman Sachs.

On the downside, software giant Sage (-7.5%) may well have reiterated FY growth guidance, however, Q1 results fell short of expectations and a stronger GBP has weighed on sentiment, putting paid to a 6-month rising channel. A strong GBP also hindered advertising behemoth WPP (-6.7%) along with preference for peer ITV, forcing it below November rising support. Lastly, pest-controller Rentokil (-6.3%) extended a recent breakdown to trade just shy of September lows while Antofagasta (-5.2%) suffered from a copper price sell-off and Q4 production update (results) that failed to inspire.

As you’ve read, share prices move for many reasons, not just quarterly results. I’ve discussed a fair few but I could still add politics (elections, referendums), currencies, management changes, contract wins, weather and many more. My point is that, as a trader or investor, you need to be aware of the multiple drivers in play at any one time, for all the shares you either have a position in or are considering. For some shares, Brexit uncertainty has a major influence on sentiment, for others not. A strengthening pound is a hindrance to many shares, but not all. One size does not fit all.

Accendo Markets – be it here in Research, or on the Trading floor – is here to help you every day. Our job is to ensure you’re kept up to date with both existing and emerging drivers on your chosen shares, so you’re in a position to buy or sell as soon as possible, to trade at the opportune moment. Sign up to our award winning research service to join our daily audience with whom we help with trade ideas, technical observations, macro-economic assessment and much more. Go on, see what you’ve been missing. Make the right decision.

Mike van Dulken, Head of Research, 26 Jan 2018