London midday: Stocks push higher as LSE rallies on takeover offer

11 September 2019

(Sharecast News) - London stocks had extended gains by midday on Wednesday, with deal news providing an added boost as worries about Sino-US trade relations eased.
The FTSE 100 was up 0.9% at 7,336.34, while the pound was flat against the dollar and the euro at 1.2353 and 1.1185, respectively.

Sentiment got a lift after China's finance ministry moved to exempt 16 types of US products from its additional retaliatory tariffs.

Neil Wilson, chief market analyst at <em></em>, said the news suggests some detente ahead of high levels talks between the two nations.

"At the very least it suggests a willingness to engage seriously in these talks. Nevertheless I think we remain a long way and even a presidential election away from a deal. The firing of US national security advisor John Bolton has also eased fears about an imminent escalation in tensions between the US and Iran," he said.

"Meanwhile all eyes are on the European Central Bank and its expected stimulus package tomorrow."

In London equity markets, <strong>London Stock Exchange</strong> rallied as it confirmed that Hong Kong Exchanges and Clearing has made an "unsolicited, preliminary and highly conditional" &#163;29.6bn offer for the company, which it will consider.

Richard Hunter, head of markets at <em>Interactive Investor</em>, noted the fact that part of the proposal requires the LSE to back away from its recent $27bn deal to buy financial data and trading platform provider Refinitiv, saying this appears to be an early stumbling block.

"The proposal is a fascinating prospect, but far from a done deal. The fact that the LSE share price has already retreated from the initial 10% spike on release of the news may reflect some initial scepticism around the likelihood of the deal going through," Hunter said.

Neil Wilson was also unconvinced that a deal would be done, calling the bid "a non-starter".

"It's a bold move and one that appears to have a low chance of success. Given the long and ignoble history of bids for LSE we think there is a very high bar to clear in order for this to succeed. Whilst HKEX already has a foothold in the UK via its ownership of the LME, the LSE is a different ball game entirely."

He added that political considerations will be front and centre, with the UK government unlikely to want to see such a vital symbol of UK financial services strength owned by foreigners.

<strong>JD Sports Fashion</strong> racked up strong gains for the second day running following well-received interim results on Monday.

<strong>AstraZeneca</strong> was on the front foot as <em>Citi</em> reiterated its 'buy' rating on the stock, which has been its preferred global pharma major for the last five years.

<strong>Galliford Try</strong> reversed earlier losses to trade up even as it posted a 27% drop in full-year pre-tax profit to &#163;104.7m, a day after it announced that it was back in talks with <strong>Bovis Homes</strong> over the sale of its housebuilding arm.

<strong>Market Movers</strong>

FTSE 100 (UKX) 7,336.34 0.94%
FTSE 250 (MCX) 20,022.10 1.43%
techMARK (TASX) 3,816.34 0.89%

<strong>FTSE 100 - Risers</strong>

London Stock Exchange Group (LSE) 7,127.94p 4.76%
Hargreaves Lansdown (HL.) 2,049.00p 3.93%
Persimmon (PSN) 2,027.00p 3.87%
Ashtead Group (AHT) 2,342.01p 3.86%
Rolls-Royce Holdings (RR.) 843.40p 3.56%
British Land Company (BLND) 548.54p 3.07%
Standard Life Aberdeen (SLA) 272.40p 3.03%
Auto Trader Group (AUTO) 517.80p 2.98%
HSBC Holdings (HSBA) 631.60p 2.93%
Centrica (CNA) 72.50p 2.92%

<strong>FTSE 100 - Fallers</strong>

Just Eat (JE.) 698.00p -1.69%
Smith &amp; Nephew (SN.) 1,867.00p -0.90%
Compass Group (CPG) 1,979.00p -0.55%
GlaxoSmithKline (GSK) 1,632.60p -0.55%
Antofagasta (ANTO) 914.60p -0.54%
Intertek Group (ITRK) 5,410.00p -0.48%
Reckitt Benckiser Group (RB.) 6,349.00p -0.47%
Unilever (ULVR) 4,930.57p -0.46%
Marks &amp; Spencer Group (MKS) 200.21p -0.44%
Informa (INF) 832.00p -0.34%

<strong>FTSE 250 - Risers</strong>

TI Fluid Systems (TIFS) 188.40p 7.66%
Spectris (SXS) 2,478.00p 6.99%
Ted Baker (TED) 1,064.00p 5.77%
SIG (SHI) 128.40p 5.59%
IP Group (IPO) 66.45p 5.31%
Stagecoach Group (SGC) 130.70p 4.81%
Intu Properties (INTU) 43.70p 4.80%
Restaurant Group (RTN) 139.50p 4.65%
Drax Group (DRX) 293.80p 4.63%
Aston Martin Lagonda Global Holdings (AML) 582.20p 4.26%

<strong>FTSE 250 - Fallers</strong>

Cairn Energy (CNE) 191.80p -4.20%
Future (FUTR) 1,244.00p -1.58%
Contour Global (GLO) 191.00p -1.55%
Funding Circle Holdings (FCH) 103.60p -1.33%
PureTech Health (PRTC) 273.30p -0.98%
Pershing Square Holdings Ltd NPV (PSH) 1,548.00p -0.90%
Convatec Group (CTEC) 174.40p -0.80%
Millennium &amp; Copthorne Hotels (MLC) 680.00p -0.73%
Energean Oil &amp; Gas (ENOG) 981.00p -0.71%
HGCapital Trust (HGT) 232.50p -0.64%