London midday: Stocks slightly higher as investors eye Brexit, M&A news
Stocks in London were slightly firmer by midday on Monday thanks to strength in the mining sector and a flurry of M&A activity, as investors looked cautiously ahead for rate decisions from the Federal Reserve and the Bank of England and braced for Prime Minister Theresa May to trigger Article 50.
The FTSE 100 was up 0.3% to 7,365.74, with heavily-weighted miners providing much of the upside amid rising metals prices.
There are no major UK data releases due, but market participants will be eyeing a vote in the Commons later, with MPs likely to overturn amendments made by the House of Lords. Prime Minister Theresa May could trigger Article 50 as early as Tuesday.
Oanda analyst Craig Erlam said traders appeared to be in wait-and-see mode at the start of the week, most notably focusing on the Federal Reserve on Wednesday.
The Fed is widely expected to raise the funds rate by 25 basis points to between 0.75% and 1.00%.
"The clearly coordinated effort to convince investors that a rate hike is firmly on the table on Wednesday, from a position in which it appeared out the question, has almost worked too well with markets now almost fully pricing one in," he said.
"The UK will also be in focus this week but it may not necessarily be the Bank of England monetary policy decision or the jobs data that grabs our attention. With Theresa May’s end of March article 50 deadline fast approaching, parliament is set to debate two amendments to the bill added by the House of Lords that would guarantee the rights of EU nationals in the UK and give parliament a vote on the final Brexit deal. The vote is particularly important for investors as it would theoretically reduce the possibility of a hard Brexit, the only downside being that in turn it may weaken May’s negotiating position."
On the corporate front, M&A news was in full swing. Housebuilder Bovis Homes surged as it said it was in merger talks with Galliford Try, after it rejected a £1bn offer from Redrow.
Meanwhile, shares in Amec Foster Wheeler rocketed as it agreed the terms of an all-share offer from oilfield services company Wood Group that values the engineer at around £2.2bn.
Under the terms of the deal, Amec shareholders will receive 0.75 new Wood Group shares for each of their shares. This represents a value of around 564p per Amec share and a premium of around 15.3% to the closing price of Amec's shares on Friday.
HSBC was higher after saying it has hired ex-Prudential boss Mark Tucker to replace Douglas Flint as chairman of the world's fourth largest bank.
Lifted by M&A rumours last week, BP gushed lower as oil prices retreated after data from Baker Hughes on Friday showed the number of active rigs drilling for oil rose by eight to 617 last week, marking the eighth weekly rise.
Allied Minds retreated as its co-founder and chief executive Chris Silva stepped down with immediate effect, to be replaced in the short term by non-executive director Jill Smith.
Saga was in the black after UBS upgraded the stock to 'buy' but Homeserve was hit by a downgrade to 'underperform' from Jefferies.
Standard Life was weaker after Berenberg cut the stock to 'hold', while Domino's Pizza fell after a downgrade by Citigroup.
On Thursday, the Bank of England's latest rate announcement is due, although no changes are expected.
Market Movers
FTSE 100 (UKX) 7,365.74 0.31%
FTSE 250 (MCX) 19,022.97 0.32%
techMARK (TASX) 3,472.53 0.26%
FTSE 100 - Risers
Fresnillo (FRES) 1,439.00p 5.81%
Anglo American (AAL) 1,194.50p 4.73%
Capita (CPI) 569.00p 4.50%
Rio Tinto (RIO) 3,298.50p 3.78%
Antofagasta (ANTO) 773.50p 3.41%
BHP Billiton (BLT) 1,278.50p 2.73%
Glencore (GLEN) 317.60p 2.27%
Randgold Resources Ltd. (RRS) 7,000.00p 2.26%
easyJet (EZJ) 995.00p 1.84%
Smiths Group (SMIN) 1,556.00p 1.57%
FTSE 100 - Fallers
BP (BP.) 462.85p -1.67%
BT Group (BT.A) 337.80p -1.36%
Standard Life (SL.) 375.40p -1.21%
Pearson (PSON) 668.50p -1.18%
Royal Bank of Scotland Group (RBS) 242.90p -0.86%
RSA Insurance Group (RSA) 588.00p -0.68%
Unilever (ULVR) 4,011.00p -0.61%
Centrica (CNA) 221.50p -0.58%
GKN (GKN) 369.50p -0.54%
Reckitt Benckiser Group (RB.) 7,283.00p -0.52%
FTSE 250 - Risers
Amec Foster Wheeler (AMFW) 557.50p 13.96%
Bovis Homes Group (BVS) 915.00p 10.51%
Hochschild Mining (HOC) 257.40p 8.15%
Centamin (DI) (CEY) 169.90p 4.62%
Saga (SAGA) 201.80p 4.24%
Kaz Minerals (KAZ) 473.40p 4.11%
National Express Group (NEX) 371.80p 3.42%
G4S (GFS) 304.60p 3.39%
Wood Group (John) (WG.) 777.00p 3.32%
Hunting (HTG) 554.00p 3.26%
FTSE 250 - Fallers
Homeserve (HSV) 527.00p -5.89%
Evraz (EVR) 200.90p -5.68%
Indivior (INDV) 329.00p -4.53%
Sophos Group (SOPH) 269.60p -3.68%
AA (AA.) 262.20p -3.43%
Domino's Pizza Group (DOM) 334.90p -3.38%
Hill & Smith Holdings (HILS) 1,240.00p -2.36%
Petra Diamonds Ltd.(DI) (PDL) 127.70p -2.22%
Essentra (ESNT) 553.00p -2.12%
Dignity (DTY) 2,513.00p -1.64%