LONDON (AFP) – London’s stock market fired its way to another record peak yesterday, with investors gripped by a series of eye-catching takeovers this week for listed United Kingdom (UK) companies.
The British capital’s benchmark FTSE 100 index jumped to 8,136.52 points, notching up a record high for the fourth session running in a hectic week for merger and acquisition activity which also buoyed eurozone indices.
Cybersecurity firm Darktrace yesterday became the latest target, joining mining heavyweight Anglo American and music rights owner Hipgnosis Songs Fund on the takeover roster.
Investors were awaiting the release of the United States (US) Federal Reserve’s preferred gauge of inflation, the personal consumption expenditures (PCE) index, hoping for an idea about its plans for interest rates ahead of next week’s policy meeting.
Back in London, Anglo American yesterday rejected a blockbuster USD38.8-billion takeover bid from Australian rival BHP, slamming it as “highly unattractive” and “opportunistic” and sending its shares down one day after soaring on initial news of the offer.
Darktrace meanwhile accepted a USD5.3-billion takeover offer from US private equity firm Thoma Bravo, sending its share price shooting higher.
A battle also brewed to buy UK music rights owner Hipgnosis Songs Fund after US rival Concord increased its takeover offer, slightly beating a bid by Blackstone.
“What a fantastic week for the FTSE 100. We’ve had new record highs, yet more takeover action, and everyone is talking about UK stocks in a positive way,” said AJ Bell investment director Russ Mould.
He added that first-quarter NatWest results also buoyed market sentiment, as the UK bank’s pre-tax profit fell but beat expectations.
Added to the mix, forecast-topping earnings from Microsoft and Alphabet helped soothe investor worries that a tech-fuelled global markets rally may have been overdone.
In Asia, major equity markets rose, while the yen hit a fresh 34-year low after the Bank of Japan (BoJ) stood pat on interest rates.
However, the mood was clouded by fresh worries about the economic outlook after worse-than-expected US data combined with a forecast-topping print on core inflation that fanned speculation the country could top into stagflation.
Asia has, however, enjoyed a largely upbeat week on the back of a healthy earnings season, which partially offset fading hopes for Fed rate cuts.
The rally has been helped by blockbuster reports from heavyweights Microsoft and Alphabet, which topped estimates, while the latter also announced its first dividend. Social media company Snap also provided a bullish revenue projection. All three soared in after-hours trade, helping push up US futures.
Investors were keeping a close eye on Tokyo after the yen sank further after the BoJ held interest rates after raising them for the first time in 17 years last month.
