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(Alliance News) - Stock prices in London opened mixed on Monday with the internationally exposed FTSE 100 benefiting from weakness in the pound.
M&A news was providing investors with added interest Monday morning, with Countrywide and Elementis, among others, receiving takeover offers.
UK Prime Minister Boris Johnson and European Commission President Ursula von der Leyen will assess whether a post-Brexit trade deal can be salvaged following a weekend of tense negotiations.
The two leaders will speak on Monday evening - their second call in a little over 48 hours - after their top negotiators spent Sunday locked in detailed talks.
David Frost and his EU counterpart Michel Barnier were ordered back to the negotiating table in a final push to see if they could break the stalemate.
However Irish premier Micheal Martin, who has been closely following the talks process, warned that they remained on a "knife-edge". Martin said there appeared to be a "very challenging issue" still to be resolved over the so-called "level playing field" rules on fair competition.
All eyes are on an EU summit on Thursday, with the prospect that any deal - or the failure to find one – will be put to the bloc's 27 leaders at that time. A source close to the talks said the situation was "very difficult" and that negotiations were in their "last useful days".
Without a deal, tariffs would be levied on the huge volumes of trade passing between the UK and the European continent, through the Channel tunnel and by ship, starting on January 1.
The FTSE 100 index was up 10.19 points, or 0.1%, at 6,560.42 early Monday. The mid-cap FTSE 250 index was down 97.12 points, or 0.5%, at 20,085.57. The AIM All-Share index was up 0.4% at 1,072.74.
The Cboe UK 100 index was up 0.1% at 653.35. The Cboe 250 was down 0.5% at 17402.54. The Cboe Small Companies down 0.1% at 11,712.00.
In mainland Europe, the CAC 40 in Paris was down 0.7% while the DAX 30 in Frankfurt was down 0.5% early Monday.
The pound was quoted at USD1.3297 early Monday, sharply lower from USD1.3470 at the London equities close Friday.
At the end of last week, sterling breached the USD1.35 mark, reaching its strongest level since May 2018 on hopes of a Brexit trade agreement. However, cable fell sharply on nervousness over whether a deal will be agreed.
"The Brexit-weakened pound is giving the FTSE a leg up in addition to optimism surrounding the roll out of Pfizer's Covid vaccine which starts this week," said City Index analyst Fiona Cincotta. "The softer tone surrounding the pound is beneficial to multinationals on the FTSE 100 which earn abroad. This accounts for over 70% of the index, boosting it higher."
In the FTSE 100, AstraZeneca was up 2.0% after Morgan Stanley raised the Anglo-Swedish drugmaker to Overweight from Equal Weight. Additionally, on Sunday, AstraZeneca reported ACE-LY-004 phase II trial results, showing efficacy and a steady safety profile for Calquence in mantle cell lymphoma.
At the other end of the large caps, HSBC was down 2.1% after Bank of America downgraded the China-focused lender to Underperform from Neutral.
Elsewhere in London, Countrywide was up 18% at 302.32 pence after the estate agent received an improved offer from peer Connells. Connells offered 325p per share in cash, saying it raised its offer by 30% following discussions with Countrywide's major shareholders.
In response, Countrywide said it will evaluate the merits of the Connells offer but urged shareholders to take no action in the meantime.
Elementis was down 2.1% at 124.10p after the speciality chemicals company said that it received a revised conditional proposal from Minerals Technologies late Friday for a possible cash offer for Elementis at 130 pence per share.
The board of Elementis rejected the offer, saying it was significantly short of a value that would merit engagement and access to the company's non-public information, despite the "continued opportunistic bidding tactics of Minerals Technologies".
The euro was priced at USD1.2111, down from USD1.2140. Against the Japanese yen, the dollar was trading at JPY104.19, flat from JPY104.20.
Brent oil was quoted at USD49.05 a barrel on Monday morning, flat from USD49.08 late Friday. Gold was trading at USD1,838.02 an ounce, up from USD1,832.24.
The Japanese Nikkei 225 index ended down 0.8%. In China, the Shanghai Composite closed down 0.8%, while the Hang Seng index in Hong Kong finished down 1.3%.
Investor sentiment in Asia was hurt by reports that the US is considering fresh sanctions on several Chinese officials over their roles in the disqualification of lawmakers in Hong Kong, as Donald Trump presses ahead with his fight against Beijing before leaving office.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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