FTSE 250 keeps pace with America’s big guns

Our stocks writer rounds up the main action in the markets as Britain’s second index continues to deliver gains to match the US giants.

The record-breaking FTSE 250 index continues to stand toe-to-toe with Wall Street's major indices after another risk-on session sent mid-cap stocks as much as 6% higher today.

The tech-laden Nasdaq and S&P 500 are up 16.5% and 19% this year at all-time highs, but the FTSE 250 index is now at 17% after breaching the 24,000 threshold earlier today.

The FTSE 100 index, which has been more exposed to the recent strengthening of the US dollar, is up just over 10% and remains well short of record territory.

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Today's latest rally took the FTSE 250 index as high as 24,054 and means the UK-focused second-tier benchmark has risen by almost 10% in the past month alone.

Engineering consultancy Wood Group (LSE:WG.) led the way today with a gain of 6% in a delayed response to yesterday's half-year results, when it highlighted the potential boost to 2022 orders from US president Joe Biden's $1 trillion infrastructure spending bill.

The shares rose to 247.5p and are back where they were in June to offset the disappointment of no resumption of dividend payments in the interim results.

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Covid vaccination progress in the US boosted demand for shares in the transatlantic cinema chain Cineworld (LSE:CINE), which lifted 3p to 69.3p, and there was strong investor appetite for Frankie & Benny's operator Restaurant Group (LSE:RTN) as shares improved 4p to 124.4p.

Coverage of the record FTSE 250 performance has focused on the recent spate of mid-cap takeover action, including the deals for Morrisons (LSE:MRW) and Meggitt (LSE:MGGT).

But this overlooks some stunning progress by individual stocks, the most significant being newspaper publisher Reach (LSE:RCH) after its shares rallied 191% this year, including 13.8p to 406.78p today.

Stock market newcomer Auction Technology Group (LSE:ATG), which has almost doubled in value since its February flotation, was also 44p higher at 1,556.78p.

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In a session light on corporate news, gambling group Rank (LSE:RNK) surged 4% after it emerged that HMRC has decided not to appeal a tribunal ruling made in June regarding VAT paid on slot machine income between April 2006 and January 2013.

The parties now have 60 days to agree the exact amount of the refund, which Rank still expects to be £80 million.

The Grosvenor casinos and Mecca bingo halls owner disputed the VAT charges on gaming machines, based on there being no similar levy on traditional and online casino games.

Analysts at Peel Hunt said: “This is excellent news on simple valuation grounds. It also removes any residual pressure on Rank's balance sheet and puts Rank back in a position where it can plan for the long term in terms of investment.”

Shares were 7.4p higher at 180p, but Peel Hunt has a price target of 240p.