MARKET UPDATE – after initial frenetic activity – “All quiet on the Western Front!”

At 2.45pm the FTSE 100 was up 35 points. After the initial early morning ‘jockeying for position’ had petered out, the market seemed as quiet as the grave.  The FTSE has been up 35 for 3 hours.  Wall Street has opened with a reasonable amount of poise, though without the sort of vigour that would suggest sentiment had dramatically improved resulting in stocks sailing in to calmer waters. There have been three deals today – Zurich Financial Services having a nibble at RSA at about 500p, Melrose selling assets to Honeywell and GKN acquiring Fokker – all of which could include the respective pension liabilities venturing to suggest that the aggressive issuance of bonds means that corporate bond yields are on the rise. Melrose was up 9.5%, RSA up by 14.5% and GKN 7.5% to the good. The placing of GKN’s shares was made at 305p.  Investors seemed to give the seal of approval to this level M&A activity. Informa was also up 7% with not only good figures but a decent outlook.


Of the slew of other companies posting numbers, BP made a soft start thanks to superficially disappointing numbers, but at the time of writing its shares are up 1.5%. ITV rose like a grilse early on – up 3.4% before settling up 1.7%. Though viewing figures are lower, advertising revenues were up 5% and the outlook surrounding the Rugby World Cup was encouraging. Next was up 2.2% on the back of stellar Directory sales. Segro was 2% to the good.  Merlin Entertainment recouped much of yesterday’s 4.28% loss – +3%. Royal Mail Group took a blow below the belt, losing 3% as a result of negative regulatory comment. Royal Dutch Shell was flat ahead of Thursday’s numbers and Barclays was 1p in advance of tomorrow’s results.


2nd quarter GDP came in, in line with expectation at +0.7%, up from the 1st quarter reading of +0.4%. The ONS said much of this improvement was due to the service sector and despite a disappointing drop in manufacturing -0.3%. Many believe that the quality of the data was sufficiently positive to support a Carney initiated suggested rate rise in early 2016.


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