LONDON MARKET MIDDAY: FTSE 100 hits high on offer for Anglo American

(Alliance News) - The FTSE 100 was outperforming European markets at midday on Thursday, with the index boosted to a record high thanks to takeover talks.

Anglo American shares led the charge on Thursday, after it confirmed that it was "reviewing" a takeover bid from its larger Australian rival BHP Group.

The FTSE 100 index was up 54.22 points, 0.7%, at 8,094.60. The FTSE 250 was down 20.05 points, 0.1%, at 19,699.32, and the AIM All-Share was up 0.33 of a point at 755.02.

The Cboe UK 100 was up 0.7% at 808.09, the Cboe UK 250 was down 0.1% at 17,046.05, and the Cboe Small Companies was up 0.7% at 15,423.32.

In European equities on Thursday, the CAC 40 in Paris was down 0.8%, while the DAX 40 in Frankfurt was down 0.9%.

The US economic calendar on Thursday has a gross domestic product reading at 1330 BST. Numbers are expected to show quarter-on-quarter GDP growth eased to 2.5% in the first three months of 2024, from the 3.4% recorded in the final quarter of 2023.

"That would be the slowest quarterly GDP growth rate for three quarters but it would still be in excess of most estimates of trend growth, reinforcing caution among Fed policymakers to cut interest rates," analysts at Lloyds said.

There is also US trade balance data and the weekly initial jobless claims at the same time.

Focus will then move to Friday's personal consumption expenditures index reading for March. The annual rise in the core PCE index, the Fed's preferred gauge, is expected to have eased to 2.6% in March from 2.8% in February.

Chris Turner at ING commented: "Such an outcome would again be too hot for the Fed's disinflation narrative and would keep expectations of the 2024 Fed easing cycle contained."

The pound was quoted at USD1.2521 at midday on Thursday in London, up compared to USD1.2432 at the equities close on Wednesday. The euro stood at USD1.0728, higher against USD1.0687. Against the yen, the dollar was trading at JPY155.65, up compared to JPY155.06.

M&A prospects gave the FTSE 100 a spring in its step, as it hit a record high of 8,102.14 points.

Anglo American rose 11%.

BHP confirmed it has offered to buy mining peer Anglo American in an all-share deal valuing the latter at GBP31.1 billion.

Anglo American earlier on Thursday said it was reviewing a takeover tilt from BHP, which now has until May 22 to make a firm offer for Anglo American.

“The London stock market is shrinking fast as companies are either taken over, switch listing to the US or delist to get out of the public's eye. It's crisis time for the London Stock Exchange as it fights to preserve the integrity of the UK market,” said Dan Coatsworth, investment analyst at AJ Bell.

Unilever rose 5.6%.

The owner of Marmite, Dove soaps and Domestos said sales in the first three months of 2024 rose 1.4% to EUR14.96 billion from EUR14.75 billion a year prior.

Chief Executive Hein Schumacher highlighted "strong performances from Dove, Knorr, Rexona and Sunsilk."

"We are implementing the growth action plan at speed, focused on three clear priorities: delivering higher-quality growth, creating a simpler and more productive business, and embedding a strong performance focus. This is underpinned by our commitment to do fewer things, better and with greater impact."

AstraZeneca was up 5.2%, after it delivered impressive growth in sales and profit in the first quarter.

The Cambridge, UK-based pharmaceuticals manufacturer reported pretax profit jumped 24% in the first three months of 2024 to USD2.80 billion from USD2.26 billion a year prior.

Revenue rose 17% to USD12.68 billion from USD10.88 billion a year earlier.

In the FTSE 250, Inchcape rose 7.7%, as it looks ahead to its future as a pureplay distribution company.

The automotive distributor said revenue rose 5% on a reported basis to GBP2.3 billion in the first quarter of 2024. On an organic basis, the figure edged up 6% and at constant FX rates was 11% higher.

In April, Inchcape announced a deal to sell its UK retail operations of GBP346 million, following a review of strategic options it kicked off earlier this year.

"Our positive start to 2024 reflects the underlying quality of our business and we have confidence in, and we have reiterated, our outlook for the year," Chief Executive Duncan Tait.

Wizz Air rose 5.4%.

The Budapest-based budget airline expects to report net income in the range of EUR350 to EUR370 million for the full year to March 31, in line with guidance.

In a trading update, Wizz Air said total revenue is expected to be in the range of EUR5.05 billion to EUR5.10 billion, reflecting stronger ticket revenue and pricing, partially offset by softer ancillaries in the second half. Full year revenue per available seat is expected to be mid-single digit per cent higher compared to last year, as guided.

Amongst London's small caps, LSL Property Services rose 6.7%.

LSL, which services mortgage intermediaries and franchised estate agencies, swings to a pretax profit of GBP4.9 million in 2023 from a loss of GBP23.8 million a year earlier.

However, revenue fell to GBP144.4 million from GBP217.5 million.

Stocks in New York were called lower. The Dow Jones Industrial Average was called down 0.4%, the S&P 500 index down 0.6%, and the Nasdaq Composite down 0.9%.

Brent oil was quoted at USD86.88 a barrel at midday in London on Thursday, down from USD88.12 late Wednesday. Gold was quoted at USD2,325.90 an ounce, lower against USD2,329.42.

By Sophie Rose, Alliance News senior reporter

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