British stocks enjoy best day in six months on pound collapse, merger buzz - MarketWatch

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Share price information is displayed on screens at the London Stock Exchange, which announced it may buy a financial data and infrastructure provider.

British stocks on Monday enjoyed their best single-day performance in six months as the pound collapsed on concerns the U.K. will leave the European Union without an agreed-upon deal.

The FTSE 100 UKX, +1.91%  rallied 2% to 7,698.52, the best gain of the major European stock markets. The pound tumbled through the $1.23 level to a two-year low as the new Boris Johnson government stepped up plans to leave the EU in a so-called no-deal Brexit.

Read: British pound falls below key level, reaches new two-year low on no-deal Brexit concerns

Heavyweight Vodafone Group VOD, +4.55% VOD, +1.89%  extended last week’s gains from announcing it may sell its European towers business, with shares rising another 4.5% on Monday.

The M&A news didn’t inspire the action across the Atlantic as U.S. stock futures SP00, -0.20%  pointed to a flat start for the Dow Jones Industrial Average DJIA, +0.02%  . The U.S. Federal Reserve is due to cut interest rates on Wednesday, with the markets unsure whether the rate cut will be a quarter-point or a half-point.

In its first major deal since ex-Goldman Sachs executive David Schwimmer took the reins as CEO, the London Stock Exchange Group LSE, +15.06%  said it’s in talks to buy Refinitiv, owned by Blackstone BX, -0.46%   and Thomson Reuters TRI, -2.03%, in a $27 billion deal to bulk up its offerings of financial data and infrastructure. LSE shares jumped nearly 15%.

Analysts at UBS, who rate LSE at neutral, said the deal would lift LSE earnings by 8% in its first year and by 20% in year three, excluding any refinancing benefits.

Just Eat JE, +24.42% jumped 25% to 795 pence after it and Takeaway.com TKWY, +1.20%   announced merger talks, in a deal where the Dutch-listed group would buy the U.K.-listed company in a stock swap valuing Just Eat, using Friday’s closing prices, at 731 pence a share. Activist investor Cat Rock has stakes in both food delivery companies and has been reported to be pushing for a deal.

Ferguson shares FERG, +2.76%   rose 2% as Sky News reported that Nelson Peltz’s Trian has urged the plumbing products distributor to sell its U.K. business.

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https://www.marketwatch.com/story/lse-surges-as-merger-buzz-lifts-london-stocks-2019-07-29

2019-07-29 13:30:00Z
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