Market Round Up: Chemring is one for the patient as US deal boosts it to the stars

If only they had held on a little bit longer.

Investors who have been selling out of Chemring were cursing their impatience today after the military equipment maker proved the doubters wrong.

The group has been warning this year that it expects the defence market to be tough-going, and back in March it admitted that it was still suffering from orders being delayed.

Since then its share price had dropped a quarter, with the City particularly worried about negotiations over a US Army contract to provide spares and replacements for its “Husky” mine detection system which Chemring expected to be wrapped up by the end of April.

Today, the day after that deadline, the firm revealed that not only had the contract — worth up to $579 million (£357 million) — been agreed, but that it had also signed a separate £21 million deal with the Ministry of Defence, meaning all the contracts required to keep it on course to meet forecasts had been achieved.

In response, Chemring’s share price shot up 48.7p, or 14.92%, to 375.2p — although its recovery still has a way to go, with the stock more than 18% lower than before January’s full-year results.

With most trading desks across Europe lying empty for May Day holiday, trading was rather quiet as the FTSE 100 ticked up 14.75 points to 5752.53, with much of the excitement in the Square Mile being generated by results — particularly among the blue-chip firms. Hedge fund giant Man Group slumped 8.1p, or 8%, to 95.5p after it released first-quarter figures and boss Peter Clarke said a takeover was not needed.

Home Retail Group — another business which does not have too many friends in the Square Mile — retreated 5.4p to 101p ahead of tomorrow’s full-year results. Traders pointed to a number of recent bearish comments from analysts on the retailer, which according to reports has launched a review of its Argos business.

Having jumped up on yet another revival of takeover speculation late yesterday, Invensys moved back 4p to 218p. The far-from-fresh rumours had once again suggested China’s CSR and German giant Siemens could be potential bidders for the engineer.

Down on the fledgling index, shares in struggling life-jacket maker Cosalt were suspended at 0.82p. The firm is locked in talks to find a long-term financing solution and said it was not yet able to announce its annual results.