London stocks were little changed at the start of trading on Monday, as investors valued the latest news on the deals with disappointing data from Chinese services.
At 0835 BST, the FTSE 100 was down 0.1% to 7,117.11 with the session likely quieter than usual as US markets will be closed for Independence Day.
Investors were digesting the latest data from China, which showed growth in the services sector slowed more than expected in June. CaixinThe Service Purchasing Managers Index fell to 50.3 from 55.1 in May, well below consensus expectations for a reading of 54.9.
Pantheon Macroeconomics said: “We felt the consensus was high, especially given the decline in the official services PMI and near real-time data signals. But the magnitude of June’s drop is surprising, leaving the PMI below lower during the outbreak that started in Hubei earlier this year, though still in a totally different stage than the crater in the first quarter of last year.
“The index should improve soon as confidence is boosted by the vaccination. For now, however, the new orders index was at its lowest for 14 months, although it is still above 50. “
At home, Prime Minister Boris Johnson was due to outline the final steps in easing the lockdown at a press conference later today.
On the equity markets, Morrisons shares surged to the top of the FTSE 250 after US buyout firm Apollo Global Management said it was considering entering the race for the supermarket chain after rival Fortress filed a recommended offer of 6.3 billion pounds this weekend.
Apollo confirmed reports from the weekend that he was “in the preliminary stages of evaluating a possible offer for Morrisons.”
“No approach has been made to the Morrisons board of directors,” Apollo said. “There can be no certainty that an offer will be made, nor as to the conditions under which such an offer could be made,” he added.
Morrisons confirmed Monday that it had recommended the offer from US investment fund Fortress, owner of Majestic Wine. He has already rejected an offer from another US buyout firm Clayton, Dubilier & Rice. Rivals Sainsbury and Tesco were the best performers of the FTSE 100.
Richard Hunter, Head of Markets at Interactive investor, said: “This could lead to a three-way bidding war, with some speculation that as a result of its business relationship with Morrisons, Amazon might even come out of left field as a last-minute surprise entrant.
The news could boost the FTSE250, which is currently 11% ahead of the year to date, and even the FTSE 100 by association. The first index has risen 10.5% this year and has been at the center of international investor interest in recent months. “
GCP Student Living also rallied after confirming on Friday evening that it had received a series of non-binding proposals from a consortium of Scape Living and iQSA Holdco, and is currently in talks with them.
Market movers
FTSE 100 (UKX) 7,117.11 -0.09%
FTSE 250 (MCX) 22,796.18 0.22%
techMARK (TASX) 4,473.52 -0.09%
FTSE 100 – Risers
Sainsbury (J) (SBRY) 276.60p 1.69%
Tesco (TSCO) 227.10p 1.11%
Antofagasta (ANTO) 1,461.00p 1.00%
Fresnillo (FRES) 813.00p 0.94%
Barclays (BARC) 173.74p 0.80%
Rio Tinto (RIO) 6,003.00p 0.79%
Land Title Group (LAND) 704.80p 0.77%
British Land Company (BLND) 518.40p 0.74%
International Consolidated Airlines Group SA (CDI) (IAG) 181.44p 0.73%
Glencore (GLEN) 317.25p 0.67%
FTSE 100 – Fallers
Informa (INF) 521.80p -1.36%
Just Eat Takeaway.Com NV (CDI) (JET) 6,620.00p -1.27%
JD Sports Fashion (JD.) 974.80p -1.04%
Polymetal International (POLY) 1,583.50 p -1.00%
Rolls-Royce Holdings (RR.) 101.64p -0.92%
WPP (WPP) 993.00p -0.85%
InterContinental Hotels Group (IHG) 4,877.00p -0.81%
Unilever (ULVR) 4,240.00 p -0.70%
Associated British Foods (ABF) 2,312.00p -0.69%
Barratt Developments (BDEV) 708.40p -0.67%
FTSE 250 – Lifts
Morrison Supermarkets (Wm) (MRW) 266.70p 11.22%
GCP Student Living (DIGS) 180.80p 6.86%
Edinburgh Worldwide Inv Trust (EWI) 361.00p 2.27%
Marks & Spencer Group (MKS) 155.95p 2.16%
Mitchells and Butlers (MAB) 296.20p 2.14%
888 tracks (888) 413.40p 2.07%
CLS Holdings (CLI) 249.00p 1.84%
Babcock International Group (BAB) 298.50p 1.77%
Tablespoon (JD) (JDW) 1,255.00p 1.70%
Ultra Electronics Holdings (ULE) 2,338.00p 1.56%
FTSE 250 – Fallers
Pennon Group (PNN) 1,133.00 p -33.19%
IMI (IMI) 1,707.00p -2.35%
BlackRock Smaller Companies Trust (BRSC) 1,972.00p -1.65%
RIT Capital Partners (RCP) 2,455.00 p -1.60%
Micro Focus International (MCRO) 435.20p -1.34%
Just Eat Takeaway.Com NV (CDI) (JET) 6,620.00p -1.27%
C&C Group (CDI) (CCR) 247.40p -1.04%
Fidelity China Special Situations (FCSS) 411.00p -0.96%
Tullow Oil (TLW) 59.60p -0.96%
Dunelm Group (DNLM) 1,454.00p -0.82%
