FTSE: UK plc for sale

In mid-morning trading, the FTSE 100 is 20 points higher, lifted by Japanese acquisition activity in the UK market says Chris Beauchamp, senior market analyst at IG

FTSE: UK plc for sale

The FTSE 100 has been ‘strong-ARMed’ into positive territory this morning thanks to M&A activity, and without this the index would be just in negative territory.

The weekend was dominated by news of the coup in Turkey, but so far the impact seems to be limited outside of emerging market assets.

It would not be surprising to see other bids for UK firms that have now become cheaper thanks to the fall in sterling, so the ARM deal could simply be the first in a procession of deals. It won’t be an ugly rush, since ongoing political uncertainty will make it even more important for acquisitive firms to pick their targets carefully, and questions will linger over just how protectionist the UK may become with regards to some of its prized assets. Nonetheless, as a sign of confidence, the deal is very welcome indeed to the FTSE.

It is not even the afternoon and already FX traders have been treated to comments from BoE policymakers. Vlieghe, who voted for a rate cut last week, has stuck by his views that more easing is necessary, while by contrast Martin Weale speaks for those who think a cautious approach, loosening policy only when strictly necessary, would avoid the BoE running out of ammunition too quickly.

Ahead of the open, we expect the Dow to start at 18,538, up 22 points from Friday’s close.

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