London stocks finished in a mixed state on Monday, although the top-flight index did manage to break into the green in late trading, as the battle for inhaler maker Vectura intensified.
The FTSE 100 ended the session up 0.13% at 7,132.30, having spent much of the session below the waterline, while the FTSE 250 was down 0.01% at 23,453.44.
Sterling was in negative territory as well, last trading 0.15% weaker against the dollar at $1.3851, and 0.04% off from the euro at €1.1792.
“Having set records on an almost daily basis last week, it’s been a lacklustre start for European markets today with little in the way of direction, with weakness in commodity prices being offset by strength in the likes of defensives, with utilities and healthcare outperforming, and helping to prop up the FTSE 100,” said CMC Markets chief market analyst Michael Hewson.
“The tug of war between Philip Morris and private equity group Carlyle over Vectura stepped up a notch today when PMI put in a 165p bid for the inhaler maker.
“This has resulted in the Takeover Panel asking both parties to submit final bids by 1700 BST tomorrow, or go to an auction, which will last until 17 August.”
Hewson described it as a “high stakes decision” for Vectura, with the board coming under fire from some for even considering the bid from the tobacco giant.
“The move by Philip Morris would appear to be a recognition that cigarettes are a declining market, and that medicines and devices to deal with breathing problems are a growing one.
“It’s a somewhat ironic shift given tobacco’s role in helping to create the problem they seem to want to help solve, and a controversial one in some quarters.”
On the economic front, Germany’s headline non-seasonally adjusted trade surplus rose to €16.3bn in June, from a revised €12.5bn in May – well above consensus expectations for €13.5bn, while net revisions added €0.2bn, Destatis reported.
While the trade surplus did rebound at the end of the second quarter, the story over the whole quarter was one of a “significant” decline, Pantheon Macroeconomics noted.
The seasonally-adjusted surplus rose only slightly, to €13.6bn, after a revised €12.8bn for May.
Exports outpaced imports by a small margin, rising by 1.3% on month-on-month compared to a 0.6% increase in imports, though the quarter as a whole “wasn’t pretty”, said Pantheon’s chief eurozone economist Claus Vistesen.
Export growth in China, meanwhile, slowed in July, falling short of expectations, while imports also lost their oomph.
The country reported a 19.3% rise in exports year-on-year for the month, slowing from the 32.2% surge in June and missing Reuters-polled forecasts for a rise of 20.8%.
Imports, meanwhile, were up 28.1%, coming in below expectations for a 33% rise.
Consumer inflation in the People’s Republic slowed in July, with China’s consumer price index rising 1% year-on-year.
That was just below the 1.1% recorded in June, and well short of Beijing’s current-year target for inflation of 3%.
“Food deflation deepened sharply, thanks to base effects in pork prices, as well as a further m/m fall,” said Pantheon’s chief Asia economist Freya Beamish.
“The correction here should soon be over, especially as the declines have triggered purchases from the state reserve.”
Back on home shorts, Hargreaves Lansdown dropped 11.34% as the investment platform posted a dip in full-year pre-tax profit.
The company still said net new business inflows and assets under administration rose as demand for its services – particularly online – grew.
Investors were likely focusing on the 8% decline in the total dividend and chief executive Chris Hill’s warning that trading levels were expected to moderate.
On the upside, SSE jumped 5.01% following reports over the weekend that activist investor Elliott Management has built a stake in the company, fuelling speculation that it could be broken up or taken over.
Severn Trent and United Utilities also advanced, by 0.87% and 0.71%, respectively.
Vectura rallied 5.49% after saying it was withdrawing its intention to recommend the sweetened offer made by private equity firm Carlyle at the end of last week.
That came after an increased offer from cigarette peddler Philip Morris, after the UK Takeover Panel said the process would be put to auction if both suitors did not make final bids by Tuesday.
Elsewhere, Deliveroo shares motored ahead 4.52% after German rival Delivery Hero took a 5.09% stake in the company.
Delivery Hero now owns just under 87.4m Deliveroo shares.
Market Movers
FTSE 100 (UKX) 7,132.30 0.13%
FTSE 250 (MCX) 23,453.44 -0.01%
techMARK (TASX) 4,635.18 0.37%
FTSE 100 – Risers
SSE (SSE) 1,623.50p 5.01%
Scottish Mortgage Inv Trust (SMT) 1,375.00p 2.69%
Flutter Entertainment (CDI) (FLTR) 12,940.00p 1.73%
Ashtead Group (AHT) 5,500.00p 1.29%
Standard Chartered (STAN) 465.50p 1.05%
Next (NXT) 8,056.00p 1.03%
Rio Tinto (RIO) 6,090.00p 0.94%
Barclays (BARC) 184.38p 0.94%
Severn Trent (SVT) 2,803.00p 0.87%
Evraz (EVR) 618.20p 0.85%
FTSE 100 – Fallers
Hargreaves Lansdown (HL.) 1,454.50p -11.34%
International Consolidated Airlines Group SA (CDI) (IAG) 168.44p -3.30%
Rolls-Royce Holdings (RR.) 109.00p -2.97%
Weir Group (WEIR) 1,640.00p -2.73%
British Land Company (BLND) 517.20p -2.16%
Smiths Group (SMIN) 1,438.00p -2.11%
Polymetal International (POLY) 1,486.00p -1.95%
Land Securities Group (LAND) 710.80p -1.77%
Persimmon (PSN) 2,864.00p -1.75%
ITV (ITV) 114.75p -1.66%
FTSE 250 – Risers
Capita (CPI) 43.11p 7.34%
Clarkson (CKN) 3,505.00p 7.20%
Rank Group (RNK) 179.40p 6.15%
Vectura Group (VEC) 173.20p 5.49%
Playtech (PTEC) 388.60p 3.79%
Frasers Group (FRAS) 609.50p 3.58%
Synthomer (SYNT) 545.00p 3.22%
Spirent Communications (SPT) 270.00p 3.13%
XP Power Ltd. (DI) (XPP) 5,400.00p 2.83%
Liontrust Asset Management (LIO) 2,170.00p 2.35%
FTSE 250 – Fallers
Energean (ENOG) 656.00p -4.08%
Centamin (DI) (CEY) 98.18p -3.69%
Petropavlovsk (POG) 19.86p -3.22%
Pagegroup (PAGE) 601.00p -3.21%
Shaftesbury (SHB) 613.50p -3.08%
Aston Martin Lagonda Global Holdings (AML) 1,982.00p -2.84%
Capital & Counties Properties (CAPC) 172.80p -2.65%
easyJet (EZJ) 827.60p -2.61%
Oxford Instruments (OXIG) 2,535.00p -2.55%
Ultra Electronics Holdings (ULE) 2,990.00p -2.54%
