MARKET REPORT: Diageo shares are buzzing as it searches for a new chairman

Drinks giant Diageo continued its much-needed and welcome recovery amid reports it has launched the search for a chairman.

Shares in the group behind Guinness, Johnnie Walker and Smirnoff rose 1.1 percent, or 31.5 cents, to 2,936.5 cents, taking gains to around 12 percent in just over a week.

The rally will be a boost for boss Debra Crew, who has been under scrutiny since succeeding Sir Ivan Menezes last summer.

The latest move in the share price came as Sky News reported that Diageo is looking for a successor to chairman Javier Ferran, who has held the position since 2017.

The company is facing a sales slowdown in much of the world – but not in Britain – and this week reported a decline in sales and profits for the six months to the end of December.

Since publishing its rather dubious results on Tuesday, it has been hit by a number of broker downgrades, including from HSBC and Stifel. And while the recent share price rise is welcome, the stock is still down more than 7 percent since problems in its Latin American and Caribbean business led to a profit warning in November.

The FTSE 100 fell 0.09 percent, or 6.62 points, to 7615.54 and the FTSE 250 gained 0.2 percent, or 41.48 points, to 19172.64, as top US tech results and the outlook for interest rates dominated traders’ thoughts.

Sophie Lund-Yates, chief equity analyst at Hargreaves Lansdown, said the “storm of results on the other side of the Pound has set a fairly positive scene” for investors.

Airline shares rose after Wizz Air and Dublin-listed Ryanair reported a rise in passenger numbers since the start of the year. Wizz Air rose 10.3 percent, or 204p, to 2188p after reporting a 14.2 percent increase in passenger traffic to 4.7 million in January. That gave Easyjet a rise (2.9 percent, or 16.4 cents, to 575.2 cents), as well as British Airways owner IAG, which gained 0.9 percent, or 1.3 cents, to 147 cents.

Ryanair shares rose 1.3 percent in Ireland after it said last month it carried 12.2 million passengers – a 3 percent increase on January last year. However, it wasn’t all roses for the sector, with Ryanair revealing that more than 950 flights have been canceled due to the conflict between Israel and Hamas.

And both Ryanair and Wizz Air reported a decline in so-called load factor – the percentage of occupied seats. Ryanair said its load factor fell to 89 percent – meaning it flew planes with more than one in 10 seats empty – while at Wizz Air it fell to 82 percent.

But that wasn’t enough to dampen investor enthusiasm, with other travel stocks also posting gains. Cruise giant Carnival rose 1.2% or 14p to 1178p. Sainsbury’s (up 3 percent, or 8 cents, to 275.2 cents) and Tesco (2.8 percent, or 7.9 cents better, to 290.8 cents) were boosted by analysts at investment bank Morgan Stanley, who forecast the outlook for British grocers increased on expectations that they will benefit from falling inflation.

BP fell 1.5 percent, or 6.95p, to 458.7p after the oil and gas giant closed a refinery in Whiting, Indiana – the largest in the Midwest – following a power outage.

BP has now confirmed that Kate Thomson will become Chief Financial Officer. She filled the position on an interim basis after the departure of Bernard Looney.

Looney was forced to resign as CEO in September due to personal relationships with staff.

Finance chief Murray Auchincloss became interim boss and Thomson took over as interim finance chief. Both have been given the job permanently, making Thomson the most powerful woman ever at BP.

Polling firm You Gov said sales momentum accelerated in the last quarter despite a “challenging macroeconomic environment.” Shares fell 1.7 percent, or 20p, to 1185p.