(Alliance News) - Stock prices in London opened higher on Monday following steep declines last week, with J Sainsbury leading the FTSE 100 on a report of private equity interest.
The FTSE 100 index was up 41.42 points, or 0.6%, at 7,129.32 - having lost 1.8% last week.
The mid-cap FTSE 250 index was up 80.40 points, or 0.3%, at 23,831.29. The AIM All-Share index was up 0.3% at 1,259.04.
The Cboe UK 100 index was up 0.1% at 709.67. The Cboe 250 was up 0.1% at 21,680.52, and the Cboe Small Companies was up 0.2% at 15,333.81.
In mainland Europe, the CAC 40 stock index in Paris was 0.9% higher, while the DAX 30 in Frankfurt was up 0.5%.
Richard Hunter, head of Markets at interactive investor, said: "Markets enter the new week with some renewed optimism, having ended the previous week's tumultuous ride in positive fashion. Although volatility is likely to persist given lighter summer volumes, the weakness which the markets endured for the majority of the previous trading sessions tempted some investors to buy on the dips, with big tech in the US a notable investment destination.
"Further dips could lure international investors back into the fold in the UK, where markets are still seen as being undervalued in comparison to some of their global peers."
In the FTSE 100, J Sainsbury was the standout performer, up 9.3%, after the Sunday Times reported over the weekend that the company could be the next UK grocer to be subject of bid interest from the private equity space.
According to the report, private equity firms were exploring a potential takeover of Sainsbury's with a view to possibly launching offers of more than GBP7 billion, as the bidding war for peer Wm Morrison Supermarkets reignites interest in the UK grocery sector.
The Times reported US firm Apollo Global Management was said to be interested in the UK's second-largest supermarket chain.
Last week, Morrisons accepted a raised offer from Clayton, Dubilier & Rice worth GBP7.0 billion as rival suitor Fortress Investment Group assesses its options. Morrisons was up 0.1%, while Tesco was up 1.4%.
Apollo had decided against making an independent offer for Morrisons, instead in July saying it was in talks with Fortress to join its bidding group.
Pearson was up 2.5% after JPMorgan raised the education publisher to Overweight from Neutral.
WPP was up 0.5%. The ad agency acquired Satalia, a technology company offering artificial intelligence solutions for clients, for an undisclosed amount.
The marketing firm highlighted that Satalia builds technologies that help clients develop business strategies and improve operational efficiency. Satalia has clients including BT, DFS, DS Smith, PwC, Tesco and Unilever.
In the FTSE 250, easyJet was up 2.0% after the budget airline said it has appointed Stephen Hester as a non-executive director and chair-designate. He will replace Chair John Barton who will round off a near nine-year stint in the role in December.
Hester served as CEO of state-backed lender Royal Bank of Scotland Group during the financial crisis, replacing Fred Goodwin who led the bank to the brink of collapse in 2008. Hester left RBS, since renamed NatWest Group, in 2013 and went on to lead RSA Insurance as CEO from February 2014 to May of this year. RSA was acquired for GBP7.2 billion by a two-headed consortium composed of Canada's Intact and Scandinavian insurer Tryg. The deal closed in June.
Back in May, Sky News reported the FTSE 250-listed company had engaged recruitment firm Lygon Group to find a successor to Non-Executive Chair Barton.
At the recent AGM, Barton and Chief Executive Officer Johan Lundgren were only barely re-elected, with 43% of shareholders opposed. This followed a campaign against them by founder and largest shareholder Stelios Haji-Ioannou, who was unhappy about a contract to buy aircraft from Airbus.
Shaftesbury was up 0.5%. The landlord said it has seen improved operating environment over the past four months as occupier demand increased.
The London West End-focused real estate investment trust reported continuing recovery in occupier demand across all uses of its properties since April 1. Available-to-let vacancy at July 31 was down to 4.6% from 8.4% on March 31. A further decrease to 4.1% by August 13 was recorded, reflecting continuing leasing momentum, the company said.
Shaftesbury noted that hospitality and leisure demand improved over the period from April 1 to August 20, reflecting confidence in the long-term prospects for its West End locations. So far, weekly West End footfall has recovered to between 50% and 60% of pre-pandemic levels, it said.
In Tokyo, the Nikkei 225 stock index closed up 1.8%. In China, the Shanghai Composite ended up 1.5%, while the Hang Seng index in Hong Kong was up 1.1%. The S&P/ASX 200 in Sydney closed up 0.4%.
The Japanese private sector declined further in August, with growth in manufacturing continuing to slow and services falling deeper into contraction, survey results from IHS Markit and au Jibun Bank showed.
The au Jibun Bank flash Japan composite purchasing managers' index stood at 45.9 index points in August, compared to the final score of 48.8 points in July. The headline au Jibun Bank Japan manufacturing PMI dipped to 52.4 points in August from 53.0 in July. At 43.5 in August, the au Jibun Bank flash Japan services business activity index fell from 47.4 in July.
The pound was quoted at USD1.3640 early Monday, up from USD1.3621 at the London equities close Friday.
The euro was priced at USD1.1710, higher than USD1.1681. Against the Japanese yen, the dollar was trading at JPY109.98, up from JPY109.81.
Brent oil was quoted at USD66.50 a barrel Monday morning, rising from USD66.02 late Friday. Gold was trading at USD1,784.50 an ounce, marginally higher against USD1,783.81.
Monday's economic calendar has a slew of flash PMIs, including from the UK at 0930 BST and the US at 1445 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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