| London stocks rose in early trade on Monday, but worries about a trade war and the political situation in Germany kept a cap on gains. At 0835 BST, the FTSE 100 was up 0.1% to 7,640.02, while the pound was down 0.3% against the dollar at 1.3238 and 0.1% lower versus the euro at 1.1439. London Capital Group analyst Jasper Lawler said: "China responding in kind, on Friday, to Trump’s $50bon worth of tariffs on Chinese imports, by hitting US commodities with import pledges is unnerving investors. The tit for tat response is putting the two powers a step closer to an all-out global trade war. "Investors will now be watching carefully for Trump’s response with further measures expected. The overriding concern here is how this is going to escalate with potential fallout being a slowdown in world trade and a drop-in business sentiment. Up until now we have seen investors escape into US tech stocks but that may be starting to run its course." Events in Germany were also in focus, with Chancellor Angela Merkel under pressure from her coalition partners over her refugee and immigration policy. Merkel "faces the worst crisis of her almost 13 years in office", said economists at Berenberg. "If the Bavarian CSU does not agree to any compromise on migration policy, her current government may fall apart shortly," they warned, though they consider this unlikely. In corporate news, Virgin Money was trading higher after accepting a £1.7bn takeover offer from CYBG, the owner of Clydesdale Bank and Yorkshire Bank. CYBG will pay 1.2125 of its own new shares for each Virgin Money share, which based on a closing price at the end of last week of 306p values Virgin Money shares at 371p apiece. Indivior was on the front foot after it won a restraining order meaning that rival drugmaker Dr Reddy's has to temporarily stop activities related to the development and marketing of a generic alternative to its Suboxone opioid disorder medication. Associated British Foods was the standout gainer on the FTSE 100 after an upgrade to 'outperform' by RBC Capital Markets, while Cobham surged after Morgan Stanley upgraded the stock to 'overweight' saying it sees an improved risk/reward following a challenging period. RSA Insurance and Aviva both rose following a report in the Sunday Times suggesting that German insurer Allianz might be interested in acquiring them. Going the other way, DS Smith was under the cosh even as the paper and packaging company posted a 21% jump in full-year adjusted pre-tax profit amid growth in all regions. GlaxoSmithKline was a touch weaker following a report in the Sunday Telegraph that Coca-Cola is considering a £3bn bid for its Horlicks business in the UK, which it put up for sale last year. Rentokil was little changed as the Competition and Markets Authority said that its proposed merger with Cannon Hygiene could raise competition concerns and that the deal will be referred for a phase 2 investigation if both companies don't proposed remedies by 25 June. Rolls-Royce was under the cosh despite an upgrade to 'neutral' from 'underperform' by Credit Suisse while Ocado fell following a downgrade to 'underperform' at Bank of America Merrill Lynch. | 
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