- M&A and deals lift a number of blue chips
- UK inflation drops to four-and-a-half year low
- UK house prices surge 9.9%
- Iraq concerns still weighing on risk appetite
techMARK 2,794.67 -0.09%
FTSE 100 6,755.68 +0.02%
FTSE 250 15,660.55 -0.29%
London stocks fluctuated at a seven-week low on Tuesday, as geopolitical concerns and a sharp drop in UK inflation offset a wave of deals and M&A speculation across a number of sectors.
The benchmark FTSE 100 was broadly flat by midday, trading just 0.02% higher at 6,756 after having erased early morning gains.
Stocks have been under pressure in recent sessions on the back of continued fighting in Iraq between the army and Sunni Islamist militants. These concerns have sent oil prices
to multi-month highs while the FTSE 100 fell to 6,754.64 on Monday, its worst finish since April 28th.
The US government has deployed 275 personnel to Iraq to provide support and security for the US embassy in Baghdad. However, yet more violence overnight has kept markets in a cautious mood today on reports that parts of the city of Baquba - just 37 miles from the capital - have been taken over by the rebels.
UK data paints "mixed" picture
UK policymakers were having to deal with "more mixed news" on the economy today, according to Chris Williamson, Chief Economist at Markit. Inflation fell to a four-and-a-half year low in May while the official measure of house prices registered its largest yearly increase since June 2010.
"The divergent data will further complicate the discussion about the appropriate timing of the first increase in interest rates from their current record low," he said.
The Office for National Statistics (ONS) revealed today that the annual rate of consumer price inflation eased to just 1.5% last month, compared with 1.8% in April and below the 1.7% rate expected by analysts.
Meanwhile, the ONS also said that average house prices across the UK increased by 9.9% year-on-year in April to £260,000, with London prices up 18.7%.
Blue chips involved in M&A talk
Pharmaceutical group Shire was making gains after Reuters reported that it has hired investment bank Citi as an advisor as it braces for takeover bids. The company's Irish tax base and its mid-sized market value of £22bn makes it a prime acquisition target, analysts told the news agency.
Trading in shares
of drugs giant AstraZeneca was subdued despite reports that it is on the lookout for new potential acquisitions and partnerships in an effort to improve shareholder value. Following the company's rejection of Pfizer's bid last month, Chief Executive Pascal Soriot is said to have sought advice from investment bank Centerview Partners.
Oil major Royal Dutch Shell gained on the news that it is to raise around $5bn after tax through the sale of a hefty chunk of its stake in Australian energy group Woodside Petroleum.
Sector peer BP was also in focus on reports that it is set to sign a deal later today to supply China National Oil Corporation (CNOOC) with liquefied natural gas in a transaction valued at under $20bn.
Natural gas producer BG Group edged higher after selling its stake in the Central Area Transmission System gas pipeline in the North Sea for £562m.
Meanwhile, insurer RSA is rumoured to be looking to sell its Asian operations in an auction that could fetch up to $500m and draw a wide range of suitors. Shares were 1% higher by midday.
Whitbread gains, Ashtead and Xaar slump
There were also a host of corporate earnings out today for investors to digest.
A buoyant hotel market helped Premier Inn owner Whitbread to book a 6.9% rise in like-for-like sales in the first quarter of the year, causing shares to rise strongly.
Industrial rental group Ashtead, however, underwhelmed despite saying that profits hit record levels in the year to April 30th. Shares were sharply lower this morning.
Inkjet printing group Xaar plummeted after saying that it now expected revenues in 2014 to be below last year.
Surrey-based housebuilder Crest Nicholson was in demand after saying business has continued to flourish in a good housing market.
FTSE 100 - Risers
Shire Plc (SHP) 3,631.00p +2.69%
Whitbread (WTB) 4,280.00p +2.69%
Tullow Oil (TLW) 867.50p +1.28%
Sage Group (SGE) 395.40p +1.23%
Morrison (Wm) Supermarkets (MRW) 190.50p +1.17%
Sainsbury (J) (SBRY) 321.20p +1.10%
Mondi (MNDI) 1,061.00p +1.05%
Pearson (PSON) 1,110.00p +1.00%
RSA Insurance Group (RSA) 488.70p +0.99%
ARM Holdings (ARM) 893.50p +0.96%
FTSE 100 - Fallers
Ashtead Group (AHT) 832.00p -6.20%
Friends Life Group Limited (FLG) 313.90p -2.45%
CRH (CRH) 1,601.00p -2.26%
Kingfisher (KGF) 362.10p -2.11%
BT Group (BT.A) 378.30p -1.71%
Sports Direct International (SPD) 766.00p -1.35%
Marks & Spencer Group (MKS) 432.40p -1.26%
BHP Billiton (BLT) 1,843.50p -1.15%
Randgold Resources Ltd. (RRS) 4,564.00p -1.11%
Petrofac Ltd. (PFC) 1,255.00p -1.03%
FTSE 250 - Risers
Crest Nicholson Holdings (CRST) 336.10p +3.42%
JD Sports Fashion (JD.) 1,660.00p +2.09%
Kazakhmys (KAZ) 288.70p +1.65%
Pace (PIC) 351.10p +1.42%
Restaurant Group (RTN) 578.00p +1.40%
Lonmin (LMI) 250.30p +1.38%
Aberforth Smaller Companies Trust (ASL) 1,067.00p +1.33%
TR Property Inv Trust (TRY) 258.10p +1.33%
888 Holdings (888) 114.40p +1.24%
Inmarsat (ISAT) 738.00p +1.03%
FTSE 250 - Fallers
Xaar (XAR) 564.50p -23.97%
Big Yellow Group (BYG) 467.10p -3.45%
Home Retail Group (HOME) 175.70p -3.41%
Ladbrokes (LAD) 142.30p -3.07%
esure Group (ESUR) 264.20p -2.94%
Mitchells & Butlers (MAB) 391.20p -2.81%
Thomas Cook Group (TCG) 137.70p -2.69%
Hansteen Holdings (HSTN) 100.50p -2.43%
Polymetal International (POLY) 530.50p -2.39%
Evraz (EVR) 89.80p -2.39%