(Alliance News) - Stock prices in London opened higher on Monday, following the long holiday weekend, as China eased Covid curbs.
The FTSE 100 index was up 86.77 points, or 1.1%, at 7,619.77. The mid-cap FTSE 250 index was up 265.91 points, or 1.3%, at 20,538.71. The AIM All-Share index was up 6.35 points, or 0.7%, at 978.95.
The Cboe UK 100 index was up 1.2% at 758.74. The Cboe 250 was up 1.3% at 18,196.62, and the Cboe Small Companies was up 0.3% at 14,702.84.
In mainland Europe, the CAC 40 in Paris was up 1.0% and the DAX 40 in Frankfurt was up 0.7%.
In the FTSE 100, Melrose Industries was up 4.1% after the industrial turnaround specialist agreed to sell its Ergotron business to funds managed by Sterling Group for a total of USD650 million.
Completion of the sale is expected to occur in the third quarter of 2022 and is conditional upon US antitrust approvals. On or before completion, Melrose will announce how it intends to use the net proceeds, it said.
CRH was up 2.8% after the Irish building materials firm agreed to buy Barrette Outdoor Living, an Ohio-based maker of residential fencing and railing, for an enterprise value of USD1.9 billion.
CRH is buying Barrette from TorQuest Partners and Caisse de depot et placement du Quebec. It is paying USD1.85 billion in cash, plus taking on USD40 million in capitalised lease liabilities.
Barrette, which will be added to CRH's Architectural Products business, reported USD79 million in pretax profit in the financial year that ended January 1. CRH said the price it is paying represent a multiple of 10 times earnings before interest, tax, depreciation and amortisation.
Dublin-based CRH noted the acquisition follows the recent divestment of its Building Envelope business and represents a reallocation of capital.
Conversely, Aveva was down 0.6% after Citigroup downgraded the industrial software provider to 'sell' from 'neutral'.
In the FTSE 250, John Wood Group was up 7.0%, after Barclays raised the energy services firm to 'overweight' from 'equal weight'.
Elsewhere, eve Sleep was down 23%. The mattress seller said it is looking for a new owner to take the company private, as it warned that it will miss revenue targets this year.
The company said it needs new funding to push into the "wider sleep wellness space". It is looking for a new owner, or a major new investor, the board said.
"Having delivered a third consecutive year of growth in revenues and marketing contribution in our core UK & Ireland business in 2021, and cognisant of current trading conditions, the board now wishes to accelerate Eve's push into the wider sleep wellness space," eve Sleep said. "In order to deliver our objective of creating the first digital sleep wellness retailer, the board considers that Eve would benefit from additional investment."
eve Sleep said it was in talks with a US investor who was interested - at least for a while - in making a bid to take the company private. But discussions later lapsed, and the investor is no longer interested.
In Asia on Monday, the Japanese Nikkei 225 index closed up 0.6%. In China, the Shanghai Composite ended up 1.3%, while the Hang Seng index in Hong Kong was up 1.6%. The S&P/ASX 200 in Sydney closed down 0.5%. Beijing and Hong Kong reopened after being closed for the Dragon Boat Festival holiday on Friday.
Beijing will gradually lift Covid-19 restrictions this week, city officials said. After some easing in recent days, the Chinese capital - which reported 19 new infections Sunday - announced residents would start returning to work from Monday and schools would reopen from June 13.
From Monday, restaurants will be able to welcome customers again – if they have tested negative in the previous three days – and public transport will operate normally, the city's government said in a statement. In Shanghai, most of the city's 25 million inhabitants have been able to move freely since Wednesday.
On the economic front, service sector companies in China increased prices in May, as cost pressures continued to remain high and backlogs of work grow, due to disruption from the lockdowns imposed by Beijing to combat the spread of Covid-19.
The Caixin general services purchasing managers' index rose to 41.4 points in May from 36.2 in April, a reading that had marked a 26-month low. However, the PMI score remained well below the neutral 50-point mark, indicating that activity continued to shrink last month. Total new business fell for the fourth month in a row, Caixin Insight Group reported.
The pound was quoted at USD1.2535 early Monday, up from USD1.2490 at the London equities close on Wednesday last week, before the four-day holiday weekend.
The euro was priced at USD1.0735, up from USD1.0655. Against the Japanese yen, the dollar was trading at JPY130.50 in London, higher against JPY129.95.
Brent oil was quoted at USD120.24 a barrel on Monday morning, up from USD117.23 late Wednesday. Gold stood at USD1,853.11 an ounce, higher against USD1,843.12.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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Melrose (MRO)
CRH (CRH)
Wood Group (J) (WG.)