LONDON (Alliance News) - It was a soft start for stocks in London on Monday, with sentiment weakened by the latest round of US tariffs on China, despite supportive M&A activity and the benefit of a lower pound.
Sky and
Randgold Resources were among the best performers in the FTSE 100, driven by merger & acquisition activity, while
Thomas Cook drooped after a hot summer in Europe encouraged 'staycations', denting prices of foreign holidays.The FTSE 100 was down 0.1%, or 5.88 points, at 7,484.35 while the FTSE 250 was flat, up 1.15 points, at 20,591.51. The AIM All-Share was also flat, at 1,100.43.The Cboe UK 100 was up 0.1% at 12,694.21. The Cboe UK 250 also was up 0.1% at 18,716.95, while the Cboe UK Small Companies was off 0.1% at 12,208.08.In mainland Europe, the CAC 40 in Paris was down 0.1% and the DAX 30 in Frankfurt was 0.3% lower.
Sky was, unsurprisingly, the best performer in the FTSE 100 as it gained 8.6% to 1,721.00 pence per share.Over the weekend, US cable Comcast emerged victorious in its battle to takeover the pay-TV firm, beating Twenty-First Century Fox with a GBP30 billion bid for the FTSE 100 constituent.In a dramatic end to one of the City's most complex and convoluted takeover sagas in recent memory, Comcast won out in a day-long auction overseen by the UK Takeover Panel on Saturday.Comcast's bid was 1,728p per share, beating 21st Century Fox's 1,567p per share, after the auction went to the maximum three rounds.Shares in Sky had closed at 1,585 per share on Friday - the stock already 57% higher in the year-to-date as the Comcast-Fox bidding war unfolded - around 9% lower than Comcast's weekend bid.
Randgold Resources gained 4.7% on news of an all-share merger with Canadian peer Barrick Gold Corp.Randgold shareholders will receive 6.1280 Barrick shares per Randgold share - following the deal, Barrick shareholders will own just short of 67% of the new company with Randgold's holding the rest. The merger is expected to complete by the end of the first quarter of 2019. It will see Randgold leave the London Stock Exchange, where it is currently a FTSE 100 constituent. The new company, to be called Barrick Group, will be listed on both the New York and Toronto stock markets.Barrick Executive Chairman John Thornton commented: "The combination of Barrick and Randgold will create a new champion for value creation in the gold mining industry, bringing together the world's largest collection of tier one gold assets, with a proven management team that has consistently delivered among the best shareholder returns in the gold sector over the past decade."
Thomas Cook dived 25% - with FTSE 100-listed
TUI sinking 2.1% in a negative read-across - after the FTSE 250 travel operator warned on its annual profit following a hot summer which saw average selling prices slump.Thomas Cook also named Sten Daugaard as chief financial officer on an interim basis to replace Bill Scott, who will leave at the end of November. Thomas Cook said it intends to begin a search for a long-term CFO with immediate effect.Overall bookings for its Summer period were up 12% on a year-on-year basis, driven by the return in popularity of holidays to Turkey, Egypt, Tunisia and Greece. However, the company noted that its average selling prices were 5% lower, due to a highly competitive trading environment, as a consequence of a sustained period of hot weather across Europe over the period.Looking forward, Thomas Cook said it expects to deliver full-year operating profit of GBP280 million. Last year, the company reported an operating profit of GBP330 million. "Our recent trading performance is clearly disappointing," said Chief Executive Peter Fankhauser."Many customers spent June and July enjoying the sunshine at home and put off booking their holidays abroad, leading to even tougher competition and higher than usual levels of discounting in the 'lates' market of August and September," explained Fankhauser.In the economic calendar on Monday is the Ifo survey in Germany at 0900 BST followed by the CBI industrial trends survey in the UK at 1100 BST. In the US is the Chicago Fed national activity index at 1330 BST.Sterling was quoted at USD1.3113 early Monday, up compared to USD1.3072 in London late Friday as the pound tumbled from USD1.3265 at the equities close on Thursday due to 'no-deal' Brexit worries.On Monday, Theresa May is to meet senior ministers as she battles to save her Chequers blueprint for Brexit following last week's humiliating rebuff by EU leaders.The UK prime minister will chair a meeting of the Cabinet in Downing Street on Monday amid intense pressure to change course and seek a simpler, less ambitious deal. There is likely to be a lengthy inquest into what went wrong at last week's informal EU summit in Salzburg where May was bluntly told key elements of the Chequers plan would not work.The prime minister insists her proposal, which would see Britain maintain a "common rulebook" with the EU for trade in goods and agriculture, is the only credible option on the table which would avoid the return of a "hard border" between Northern Ireland and the Republic.But she is facing increasingly vociferous calls from Tory Brexiteers to abandon Chequers in favour of a more basic free trade agreement in goods along the lines agreed between the EU and Canada.This comes after UK Labour Party leader Jeremy Corbyn has said he will back a second Brexit referendum if it is supported by the Labour Party conference.The Japanese Nikkei 225 index and the Shanghai Composite in China are both closed on Monday, though the Hang Seng index in Hong Kong is open and is trading 1.8% lower.The largest round of US tariffs on Chinese imports came into effect Monday, with neither side showing any sign of backing down in their escalating trade war. Tariffs initially set at 10% on USD200 billion of Chinese imports into the US came into effect at 12:01 am Washington time.The tariffs will increase to 25% on January 1, US President Donald Trump said last week while announcing his largest strike yet in the trade dispute.Beijing in turn will impose tariffs ranging from 5% to 10%, depending on the product, on USD60 billion worth of US products.This comes as China has cancelled trade talks with the United States, according to a Wall Street Journal report, after both sides announced new rounds of tariffs this week. Vice Premier Liu He was planning to travel to Washington next week with a trade delegation, following an invitation from US Treasury Secretary Steven Mnuchin. However, the Wall Street Journal, citing unnamed officials on Friday, said Beijing changed its mind about sending Liu due to the fresh tranche of tariffs.
