| London stocks gave up their early gains on Tuesday as bullishness over deal news was dampened as caution over the Iran nuclear deal hit oil prices, with a splash of Italian election concerns to add to the mix. The FTSE 100 fell by just 1.4 points to 7,565.75 as it bumped up against an area of technical resistance, recoiling from an early 14-week high of just under 7,600, while Brent crude futures oil fell 2% to $74.69 as conflicting reports emerged from the White House. Sterling, having earlier been down 0.4% versus the dollar was almost flat by home time at 1.3547, and up 0.3% firmer against the euro at 1.1404 as Italian political concerns and improved German industrial production data mingled. The dollar was boosted earlier as Federal Reserve chief Jerome Powell struck the right tone in comments regarding the impact of rate rises, with his observations highlighting the fact that the Fed continues to believe that the US and broader global economies will be able to weather higher rates thanks to growth. Investors remained concerned by an announcement by US President Trump, due at 1900 BST, after he tweeted on Monday that he would be revealing his decision on the Iran deal ahead of the 12 May deadline for the nuclear pact. This and Italy were the main concerns for markets, said Chris Beauchamp, chief market analyst at IG. "The former plays into fears that the oil market is vulnerable to another supply shock as Iranian oil is taken out of the equation, causing prices to spike and economic growth to stumble." Italy was on traders' minds after talks to build a government coalition failed. While hardly surprising, Beauchamp said it "raises the possibility that popular discontent will allow a radical government into office, threatening the delicate equilibrium of the eurozone. The return of such macro fears comes as the real meat of US earnings season is mostly behind us, removing one key prop for the market at present, namely the robustness of US corporates." The pound was also likely to have been undermined by a report from UK lender Halifax that revealed house price growth unexpectedly eased in April, adding to the gloomy recent data that continues to make an imminent interest rate hike seem less likely. House prices in the three month to April were up 2.2%, down from the 2.7% growth seen in March and below expectations for a 3.3% increase. On a monthly basis, prices were down 3.1% following a 1.6% rise in March, missing expectations for a much smaller drop of 0.2%. On a quarterly basis, meanwhile, prices were 0.1% lower than in the preceding three months, marking the third consecutive declined for this measure. On the UK corporate front, London investors returned from the long weekend to a raft of deal news. Shire was the standout gainer as its board agreed a takeover offer from Japan's Takeda Pharmaceutical in a mix of cash and shares that values the FTSE 100 biotech at roughly £46bn. Three Shire directors will join Takeda's board as part of the deal. Virgin Money also racked up strong gains after Clydesdale and Yorkshire Bank owner CYBG made an all-share takeover approach that values its FTSE 250 rival at £1.6bn. CYBG picked up slightly and fellow challenger banks Metro Bank and OneSavings both rallied. Buy-to-let property lender Paragon Banking Group pushed higher after it confirmed that it is considering a possible acquisition of residential development finance lender Titlestone, while US cable network Comcast made various assurances around its bid for satellite broadcaster Sky, following reports that it is looking to raise funds to gatecrash Disney's purchase of assets from 21st Century Fox. Following an earlier proposed deal, the Competition & Markets Authority said it has referred the proposed merger of SSE's retail business and Npower for an in-depth investigation after finding competition concerns. AstraZeneca advanced after saying it had sold the rights to its antipsychotic treatment Seroquel to Luye Pharma for $538m and getting European regulatory approval for its Lynparza cancer treatment. Bookmaker William Hill rose after it said net revenue for the first 17 weeks of the year was up 3% thanks to strong online and US performances. On the downside, FirstGroup tumbled after private equity group Apollo Management said it would not be making an offer for the transport operator. Insurer Hiscox ticked a touch lower as it said gross written premiums grew by 20.3% in the first three months of the year but warned that growth in big-ticket business for the rest of the year will be more measured. In broker note action, Just Group was initiated at 'hold' by Deutsche Bank. | 
No comments:
Post a Comment