EasyJet traffic flies higher, Melrose to buy Nortek

London open

The FTSE 100 is predicted to dip by around 15 points on Wednesday morning, after its rise to 6,545.37 on Tuesday.

Stocks to watch

Melrose Industries has agreed to acquire US air conditioning and security techology group Nortek for $1.44bn in cash, funded by a proposed £1.61bn issue of new shares. FTSE 250-listed Melrose said the addition of the Rhode Island outfit would be "significantly accretive" to headline earnings per share in the first full financial year of ownership and thereafter.

Low cost airline easyJet reported a 5.8% jump in passengers for the month of June on Wednesday, with 6.94m customers taking to their orange jets, compared with 6.56m in June 2015. The FTSE 100 firm’s load factor for the month was 94.1%, up 1.4 percentage points from the 92.7% figure the same time last year.

Property company Daejan Holdings announced its preliminary results for the year to 31 March on Wednesday, with its investment property figure growing to £2bn, from a restated £1.86bn last year. The FTSE 250 firm said its net rental and related income from investment property totalled £68.19bn for the year, from £58.94m, although profit before tax slipped to £173.24m from £277.54m.

Newspaper round-up

The pound plumbed new depths against the dollar and investors rushed for the perceived havens of gold and government bonds as financial turmoil intensified in the wake of the UK’s Brexit vote, with sterling hitting $1.2798 in early Asian trading on Wednesday - its lowest in more than 31 years. Investors, spooked by a number of UK property funds halting redemptions, switched to risk-off mode and sent yields on government bonds tumbling to new lows. - Financial Times

ITV is set to seek to charge Virgin Media to broadcast its flagship channel, after the government said it will scrap a law that could boost its coffers by tens of millions of pounds a year. The UK’s public sector broadcasters, which include the BBC and Channel 5, have argued for years that that they should receive significant fees from pay-TV operators because subscribers spend most of their time viewing their channels. - Guardian

Ofcom has been accused of making “ridiculous” policy decisions that will cement BT’s position in the broadband market as a “single, unassailable wholesale infrastructure provider” in a High Court challenge by alternative network builder CityFibre. The communications regulator is planning a major overhaul of the broadband market by allowing rival service providers such as Sky and Vodafone to connect their own equipment to the high-capacity fibre-optic lines inside BT’s Openreach network at controlled prices. - Telegraph

US close

US stocks finished in the red on Tuesday as investors returned from the long holiday weekend and as concerns about the impact of Brexit mounted.

The Dow Jones Industrial Average fell 0.61%, the S&P 500 dropped 0.68% and the Nasdaq declined 0.82%.

At the same time, oil prices retreated, with West Texas Intermediate down 4.1% to $46.82 a barrel and Brent crude off 4.02% at $48.16 per barrel.