Following yesterday's surge on the back of bid speculation and M&A activity within the pharma sector, today's session looks set for a fairly flat start, with the top tier expected to inch marginally lower early on. City sources predict the FTSE 100 will open around seven points below yesterday's close of 6,681.76, having gained 57 points on Tuesday. In yesterday's session, GlaxoSmithKline (GSK) jumped after announcing a massive three-part deal with Swiss pharmaceuticals peer Novartis, which will see shareholders receive a £4bn capital return. Killik maintained a 'buy' recommendation on GSK, saying that the deal will accelerate growth, provide cost savings and generate increased returns.AstraZeneca was also rising strongly on speculation that Pfizer could make a takeover approach for the company, in a transaction valued in the region of £60bn, representing the biggest deal ever in the industry's history and the largest foreign takeover of a UK business on record. While AstraZeneca reportedly rejected the informal offer, Analyst Andrew Baum from Citigroup said he expected Pfizer to "push aggressively ahead with a second approach". In other news, it had been reported that an Ayrshire couple has donated part of their lottery winnings to the 'Yes Scotland' independence campaign, in effect tripling all of the funds now available to the unionist movement 'Better Together'.The couple have donated £3m (€3.6m) to the political movement out of the €196m which they won in a 2011 drawing from the Euromillions lottery, Spanish newspaper El Mundo reported. Chinese manufacturing PMI shows continued contractionOvernight, it was revealed that manufacturing activity in China contracted for the fourth month in a row in April, according to a private survey out Wednesday from HSBC and Markit.The 'flash' reading of the purchasing managers' index (PMI) for the Chinese manufacturing sector improved slightly to 48.3 this month from the final reading of 48 in March.The figure was in line with analysts' expectations, but still remained below the key 50-point threshhold that separates contraction and growth.The small month-on-month increase in the headline PMI figure was due to improvements in both the output and new order sub-indices, but both were still in negative territory. Rolls-Royce wins engine service contract with US militaryIn this morning's company news, power systems giant Rolls-Royce has won a contract to service AE 1107C engines for V-22 aircraft operated by the US Marine Corps and Air Force. The contract, worth $39m, will see the company provide its MissionCare services, which include repairs and general engine support.Growth rates in the first quarter at Reed Elsevier, the professional publishing group, remained "broadly consistent" with those seen last year, supported by a number of small acquisitions and one disposal. So far, the FTSE 100 company has completed £250m of its promised £600m of share buybacks, leaving £350m more purchases still to come in 2014.Petra Diamonds reported a 15% year-on-year increase in third-quarter production from 647,248 carats to 743,424, which helped to drive a 55% increase in quarterly revenue to $163.9m, which included a 29.6 carat blue diamond which sold for $25.6m. The group said it was "firmly on track" to meet its full-year target of around 3m carats. Oil services and engineering group Amec said it was trading in line with expectations and had a record £4.2bn order book, although it cautioned about the potential impact of the strong pound against the US and Canadian dollar.Associated British Foods said it delivered a resilient interim performance at a challenging time of transition for its European sugar business, and continues to expect adjusted earnings per share for the year to be similar to 2013. Adjusted pre-tax profit rose 4% to £468m for the 24 weeks ended March 1st 2014, while revenue for the period slipped 2% to £6.2bn.Analysts at Nomura have upgraded their recommendation on shares of Lloyds to 'buy' versus 'neutral' beforehand. NR
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