FTSE 250 Surges as Direct Line Rejects Aviva's Bid

The UK's FTSE 250 mid-cap index surged as Direct Line rejected Aviva's takeover bid, boosting the insurance sector. Light trading volumes marked the day due to the U.S. Thanksgiving holiday. Meanwhile, Britain's recent tax-raising budget faced criticism from businesses for increasing corporate taxes significantly.

The UK's domestically-focused FTSE 250 reached a two-week high on Thursday, driven by strong movements in the insurance sector. This came after Direct Line rejected a $4.16 billion takeover bid from Aviva, causing a 42% surge in Direct Line shares and a drop in Aviva shares by 3%.

Despite light trading volumes due to the U.S. Thanksgiving holiday, the FTSE 100 also slightly rose by 0.1%. Spirax-Sarco Engineering saw a 3% increase following positive broker ratings. Meanwhile, Sainsbury's shares were upgraded by J.P. Morgan, leading to a 2.7% rise.

On the economic front, concerns emerged over Britain's recent tax-raising budget, with businesses criticizing Finance Minister Rachel Reeves' decision to increase taxes by an additional 25 billion pounds annually. This has contributed to a decline in business sentiment within the services sector.

(With inputs from agencies.)