London open: Stocks edge up but Unilever tanks as Kraft ditches takeover plans

Stocks in London edged higher in early trade, tracking a positive session in Asia, but volumes were expected to be a little lighter than usual with US markets set to remain closed for Presidents Day.

At 0830 GMT, the FTSE 100 was up 0.2% to 7312.

Spreadex’s Connor Campbell said: “The FTSE was the meekest of the morning’s indices, rising around 15 to 25 points to cross the 7,300 mark. That leaves the index only 50 or so points away from a fresh all-time high, a small enough leap that a flurry of excitement could see the FTSE sweep to a new record peak without exerting much energy. As for the pound, it got off to a slow start, taking a mere 0.1% off both the dollar and the euro – not enough to significantly reverse the losses seen last Friday.

“Beyond the major markets the main news this Monday was the collapse of Kraft Heinz’s attempted Unilever takeover. The deal, which was only revealed on Friday, fell apart almost immediately as Unilever firmly stated the ketchup maker’s £40 per share bid was insultingly low – Kraft Heinz evidently didn’t feel up to the M&A battle this rejection suggested, announcing this morning that it was abandoning the proposed merger.”

In corporate news, Unilever sank as Kraft Heinz ditched its plans to take over the Marmite owner, just two days after it emerged the London-listed consumer goods giant had rejected a $143bn offer.

Housebuilder Bovis Homes slumped after it reported a 3% drop in full-year pre-tax profit to £155m that missed analysts’ expectations and said it would build fewer homes this year.

Shares in Interserve tanked after the construction and support services group said exiting the energy-from-waste markets was likely to cost £160m, up from a previous provision of £70m.

AstraZeneca nudged lower after announcing that it entered into an agreement with TerSera Therapeutics for the commercial rights to the ‘Zoladex’ goserelin acetate implant in the US and Canada.

On the upside, Royal Bank of Scotland rallied after saying it will abandon plans to sell its Williams & Glyn business and instead provide funds to help challenger banks, if a Treasury proposal is accepted by the European Commission.

Aerospace and defence group Rolls-Royce advanced after Goldman Sachs upgraded it to ‘buy’ from ‘neutral’, lifting the price target to 1,030p from 743p and adding the stock to its ‘Conviction’ list, saying the company has the potential to substantially increase free cash flow between now and 2020.

Retail property group Hammerson gained ground as it said full-year adjusted profits rose 9.4% to £230.7m on a jump in net rental income to £346.5m from £318.6m.

Vedanta Resources pushed up as its third-quarter revenue and earnings rose on the back of commodity prices and a ramp up of aluminium, power and ore capacities.

Investors were also digesting the latest figures from property website Rightmove, which showed growth in house prices slowed to the lowest rate in nearly four years this month. Prices were up 2.3%, marking the slowest rate since April 2013.

Still to come, the CBI industrial trends survey is at 1100 GMT.

Market Movers

FTSE 100 (UKX) 7,312.20 0.17%
FTSE 250 (MCX) 18,741.16 0.18%
techMARK (TASX) 3,361.13 0.26%

FTSE 100 - Risers

Royal Bank of Scotland Group (RBS) 257.00p 6.02%
Rolls-Royce Holdings (RR.) 698.00p 4.80%
Hammerson (HMSO) 583.50p 3.37%
Direct Line Insurance Group (DLG) 364.20p 2.91%
BT Group (BT.A) 322.10p 1.90%
Prudential (PRU) 1,644.00p 1.86%
Aviva (AV.) 507.50p 1.83%
Standard Life (SL.) 372.00p 1.31%
St James's Place (STJ) 1,104.00p 1.28%
Vodafone Group (VOD) 200.30p 1.16%

FTSE 100 - Fallers

Unilever (ULVR) 3,482.00p -8.30%
Coca-Cola HBC AG (CDI) (CCH) 1,957.00p -1.61%
Imperial Brands (IMB) 3,725.50p -1.47%
Mediclinic International (MDC) 816.00p -1.45%
Pearson (PSON) 659.00p -1.42%
Reckitt Benckiser Group (RB.) 7,000.00p -1.41%
ITV (ITV) 203.40p -1.02%
Barratt Developments (BDEV) 516.00p -0.86%
Standard Chartered (STAN) 766.90p -0.79%
Diageo (DGE) 2,257.50p -0.68%

FTSE 250 - Risers

Tullow Oil (TLW) 268.80p 3.66%
Aldermore Group (ALD) 242.20p 3.46%
Allied Minds (ALM) 384.90p 2.64%
Henderson Group (HGG) 225.40p 2.27%
Virgin Money Holdings (UK) (VM.) 346.20p 1.97%
Kaz Minerals (KAZ) 570.50p 1.97%
Redefine International (RDI) 37.93p 1.80%
Weir Group (WEIR) 1,985.00p 1.79%
Vedanta Resources (VED) 1,058.00p 1.73%
IP Group (IPO) 177.00p 1.72%

FTSE 250 - Fallers

ZPG Plc (ZPG) 0.00p -100.00%
Bovis Homes Group (BVS) 766.50p -8.86%
CYBG (CYBG) 268.50p -2.19%
Cobham (COB) 111.20p -1.94%
Berkeley Group Holdings (The) (BKG) 2,883.00p -1.87%
PayPoint (PAY) 968.50p -1.53%
Investec (INVP) 581.50p -1.52%
Crest Nicholson Holdings (CRST) 530.50p -1.49%
Bellway (BWY) 2,585.00p -1.34%
Acacia Mining (ACA) 526.50p -1.31%