- AstraZeneca jumps as Pfizer confirms interest
- US announces new sanctions on Russian officials
- Japanese retail sales surge, but analysts still cautious
- BG Group drops after CEO exit, update
- Premier Oil rejects Ophir merger approach
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UK stocks rose on Monday, helped by a surging AstraZeneca on M&A hopes, though gains were only modest as investors showed caution ahead of economic data and further developments in the Ukraine crisis.
AstraZeneca was up as much as 15% in morning trade after US pharma giant Pfizer confirmed that it had made a "preliminary, non-binding indication of interest" regarding a possible merger in January. The £60bn proposal was rejected by AstraZeneca's board but Pfizer said it is considering its next move.
While the bid speculation drove share prices
in the pharmaceutical sector higher today, the wider market was subdued after US President Barack Obama announced new sanctions against Russian officials in a bid to deter Moscow from further 'escalating' the crisis. These sanctions are expected to be outlined in further detail later today.
However, Obama said that he was holding broader measures against the Russian economy "in reserve". The news came amid reports that the Mayor of the Ukrainian city of Kharkiv had been shot.
The FTSE 100 was trading 0.4% higher at 6,709 by midday.
With little economic data due out today, analysts at Danske Bank said they expect a "quiet start to a very busy week" ahead of the Federal Reserve policy meeting on Wednesday, US ISM manufacturing data on Thursday and the all-important non-farm payrolls figures on Friday.
Stocks in Asia fell overnight despite Japanese retail sales growth coming in at a 17-year high in March. Sales rose at an annual rate of 11% last month, up from 3.6% the month before. However, the figure was in line with analysts' expectations as shoppers rushed to stores ahead of the planned increase in the national sales tax which began at the start of April.
Analysts are now concerned that the strong sales growth acceleration in March will lead to a decline in consumer spending in April. "The April number, when released next month, will highlight this perfectly and is likely to be woeful, with spending drying up significantly following the spree in March," said Market Analyst Craig Erlam from Alpari UK.
AstraZeneca jumps on potential Pfizer offer
After Pfizer's initial proposal was rejected and AstraZeneca declined to engage in further talks this month, the US group said it is "currently considering its options". Pfizer said that any potential transaction would offer AstraZeneca's shareholders a "highly compelling opportunity to realise a significant premium" to the recent share price and would include a "substantial" cash payment.
Other companies in the pharmaceutical sector were also performing well this morning as a result, including Shire, GlaxoSmithKline and Dechra Pharmaceuticals.
Heading the other way was natural gas producer BG Group after delivering a double blow to investors as it announced the departure of Chief Executive Chris Finlayson and warned its 2014 production levels would be at the lower end of expectations due to challenges in Egypt.
Ophir Energy fell after saying that Premier Oil has rejected a merger proposal and it is "no longer considering making an offer". Ophir believed that merging the two companies will provide the "potential to create a well-funded, re-focussed, full-cycle exploration and production company".