(Alliance News) -Â It was a sluggish start to Monday's session in Europe, with the US sat out for a holiday.
London's blue-chip index was struggling to make headway despite gains for fellow UK grocers on the back of takeover interest in Wm Morrison Supermarkets.
The FTSE 100 index was down just 0.10 of a point at 7,123.17 early Monday. The mid-cap FTSE 250 index was up 70.83 points, or 0.3%, at 22,817.82. The AIM All-Share index was down 0.20 of a point at 1,265.73.
The Cboe UK 100 index was up 0.1% at 708.89. The Cboe 250 was up 0.4% at 20,538.98, and the Cboe Small Companies down 0.1% at 15,473.76.
In the FTSE 100, supermarket J Sainsbury was up 1.6% in early trade and peer Tesco was 1.1% higher. Morrisons surged 11% in the FTSE 250.
The competition to buy Bradford-based Morrisons heated up at the start of the new week as the grocer received takeover interest from a third private equity group after agreeing to a GBP6.3 billion buyout over the weekend.
New-York based Apollo said it is mulling making a possible offer for FTSE 250-listed Morrisons, but is yet to make a formal approach.
Morrisons has already agreed to a takeover by a group of investors comprising Softbank Group Corp-owned Fortress, Canada Pension Plan Investment Board and Koch Real Estate Investments. Under the GBP6.3 billion deal, the group will pay 252 pence per share plus a 2p special dividend.
Morrisons shares were trading at 266.50p in London early Monday, considerably ahead of the offer price.
Richard Hunter, head of markets at Interactive Investor, noted that Apollo recently missed out on snapping up grocer Asda.
"This could lead to a three-way bidding war, with some speculation that following on from its business relationship with Morrisons, Amazon could even emerge from left field as a surprise last minute entrant," said Hunter.
In other M&A news, mid-cap GCP Student Living rose 6.9% after late Friday confirming it has received takeover interest from a consortium comprising Scape Living and iQSA Holdco, and is in talks with the duo.
GCP said it has received a "series of non-binding proposals" for the firm, other than the shares held by funds managed by APG Asset Management, to be funded by the consortium's respective primary shareholders - being funds managed by APG and funds advised by Blackstone Group International Partners.
APG currently holds just over an 11% stake in the student accommodation investor.
"The company remains in discussions with the consortium. However, following discussions with the company's independent valuer, the board is anticipating a material increase in its property valuation for the period to 30 June 2021," it said.
Elsewhere in London, Ultra Electronics rose 1.7%. The company is reviewing its full-year guidance following strong recent trading.
Since updating on its first quarter performance, the firm - which serves the defence, security, critical detection & control markets - said underlying trading in the first half has been strong and ahead of internal expectations. The order book continues to grow and is significant ahead of last year, and orders for the full year are expected to be "well ahead" of 2020.
"Group revenue growth in H1 2021 has been robust despite the previously announced mainly Covid-19 driven operational inefficiencies experienced in the Maritime SBU in Q1 2021 which are now broadly resolved," Ultra said.
As a result of the strong first half trading, Ultra is reviewing its guidance. It expects to provide, as part of the publication of its interim results, an update on outlook for the full year.
Late last month, Ultra Electronics said it had terminated talks regarding a possible combination with Cobham. Former FTSE 250 constituent Cobham, which now is controlled by Advent International, earlier had said it was mulling a potential takeover offer for Ultra, with a view to create a "global defence electronics champion".
In mainland Europe, the CAC 40 in Paris was down 0.2% while the DAX 30 in Frankfurt was 0.3% lower early Monday.
In Asia on Monday, the Japanese Nikkei 225 index ended down 0.6%. In China, the Shanghai Composite closed up 0.4%, while the Hang Seng index in Hong Kong was down 0.8%.
Growth in China's private sector continued to weaken in June at the fastest rate in 14 months, driven by a slowdown in output from the manufacturing and services sectors, data from Caixin and IHS Markit showed.
The Caixin China General Services purchasing managers index dropped considerably to 50.3 index points from 55.1 in May, but this still represented the fourteenth consecutive month of growth. The print was well below the consensus expectation of 55.7, according to FXStreet.
Business confidence remained upbeat over the next 12-months, however the new surge in virus cases hindered overall optimism in June, falling to a nine-month low.
Gold was quoted at USD1,789.40 an ounce early Monday, higher than USD1,783.83 on Friday.
Brent oil was quoted at USD76.42 a barrel, up from USD75.97 late Friday - trading around its best levels since late 2018.
The 23 members of the OPEC+ group of oil producers will try again Monday to reach agreement on how much crude to put on the market.
Since May, the group has raised oil output little by little, after slashing it more than a year ago when the coronavirus pandemic crushed demand. The current proposal is to increase output each month from August to December by 400,000 barrels per day, providing oil markets with an additional two million bpd by the end of the year.
But it is the suggestion of extending the agreement on incremental increases until the end of 2022 that has caused a hitch. The hold-out is the United Arab Emirates, which on Sunday criticised that extension as unjust.
The dollar was weaker early Monday. Sterling was quoted at USD1.3833, higher than USD1.3791 at the London equities close on Friday.
The euro traded at USD1.1854 early Monday, up from USD1.1845 late Friday. Against the yen, the dollar was quoted at JPY111.05, down versus JPY111.31.
The economic calendar on Monday has services PMIs from Germany, the eurozone and the UK at 0855 BST, 0900 BST and 0930 BST respectively. Outside of this is eurozone investor confidence at 0930 BST.
By Lucy Heming;Â lucyheming@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.
