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M&S higher on bid rumour |LV board restates Bain case
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5pm: Focus on Fed
The FTSE 100 closed the first session of the week up by 31.89 points at 7,255.46 as most attention focused on the reappointment of the Fed chairman.
Commenting on positive sentiment on Wall Street, Danni Hewson, AJ Bell financial analyst, said: “US investors clearly think it’s a case of better the devil you know and have responded to news that Jerome Powell’s been nominated for a second term as Fed chair by raising the roof.
“Both the Nasdaq and S&P 500 hit new highs; investor sentiment also buoyed by a rise in house sales despite concerns about rising prices impacting affordability.”
In London, Marks & Spencer closed up 4.7p (1.95%) at 246.50p on the back of rumoured bid interest from Apollo Global Management.
New York-based Apollo is said to consider the UK retailer a bargain and that the market has undervalued its online delivery venture with grocery giant Ocado, in which it bought a 50% stake in 2019 for £750m.
9am: M&S higher on bid rumour
The prospect of a possible bid by Apollo Global Management for UK high street chain Marks & Spencer sent its shares 3% higher in early trade.
London’s equity market opened higher as forecast despite demonstrations sweeping across Europe over lockdowns and prompting some concern over the impact on economic growth.
The FTSE 100 was trading 24.43 points higher at 7,247.87, but some volatility is expected as the consequences of the restrictions unfold.
7am: LV restates Bain benefits
The board of LV issued a further appeal to members to back the takeover offer from Bain Capital, saying the total capital that would be returned to members over time would be £616 million.
It said it had received several proposals and after due diligence and negotiation, concluded unanimously, having taken advice from the With-Profits Committee, With-Profits Actuary and its advisers, that Bain Capital offered the best outcome for LV members, employees and other stakeholders compared to all other proposals received and all strategic options considered.
Alan Cook, chairman, said: “There have been numerous theories and opinions about the process and decision. So that members can vote with the facts in front of them, we are showing the analysis we did and the conclusions we reached.
“We urge members to vote at the meetings on 10 December and vote in favour of the transaction with Bain Capital to protect both their interests and the future of LV=.”
12.01am: Slower growth
Inflation and supply chain disruption will see the economy grow at a slower pace than expected this year and next, according to the EY Item Club’s latest forecast.
The economy will grow by 6.9% this year and by 5.6% next year, it said in its autumn forecast.
This is down from its July prediction of growth of 7.6% and 6.5%, respectively, although it would still mean that growth this year was the strongest since 1941.
Scenes of rioting over new lockdowns and tighter restrictions across Europe have prompted worries over a slowdown in economic growth.
Oil prices slid sharply with Brent crude closing last week below $80 a barrel for the first time in seven weeks.
The FTSE 100 was called higher, though markets will be on alert as the lockdown scenario unfolds.
CMC Markets analyst Michael Hewson said: “European stocks may well have finished last week higher, and still within touching distance of their record highs, but the declines seen on Friday, which wiped out the gains of the previous three days suggest that markets are acutely vulnerable to sudden shifts in sentiment.
“The imposition of another lockdown in Austria, following on from the reintroduction of tighter restrictions in the Netherlands, as well as in Germany, has punctured the optimism that the vaccines could offer a clear way out of the pandemic and a resumption of normal life, as we head towards the Christmas period.”
China’s central bank is warning of ‘stagflation’ – a cocktail of economic stagnation and inflation – though markets across Asia were broadly upbeat.
The Shanghai Composite gained 0.61% while Hong Kong’s Hang Seng index dipped 0.48%
In Japan, the Nikkei 225 rose 0.09% and South Korea’s Kospi surged 1.54%.