London open: Stocks little changed but Tesco and Booker surge on merger news
London stocks were little changed in early trade as investors looked to US economic growth figures and a meeting between UK Prime Minister Theresa May and US President Donald Trump, as Tesco and Booker surged on news the two are merging.
At 0830 GMT, the FTSE 100 was up 0.1% to 7,166.38.
Accendo Markets’ Mike van Dulken said: “In focus today will be the preliminary figure for US GDP while UK PM Theresa May’s meeting with US President Donald Trump across the Atlantic this afternoon could provide some details on a potential new Transatlantic trade deal alongside the usual sound bites as to how the two countries’ “special relationship” can be revamped in the Trump era.
“The US GDP figure is expected to have cooled off somewhat after Q3’s greater than 2% surge in growth to 3.5% as the US Fed look to begin a gradual course of rate hikes from 2017 to 2019. Any upside surprise will most likely be jumped upon by the Trump team as an indication of the strengthening of the US economy, however a fall in Personal Consumption levels could highlight some economic uncertainty in the world’s largest economy.”
There are no major UK data releases due, but investors will eye the release of fourth-quarter US gross domestic product figures at 1330 GMT.
M&A news kept things interesting in London, as the boards of food retailer Tesco and wholesaler Booker Group – which owns Londis and Budgens – announced an agreement on the terms of a recommended share and cash merger to create the UK's leading food business. Under the terms of the merger, each Booker scheme shareholder would receive 0.861 new Tesco shares and 42.6p in cash, representing a value of £3.7bn for Booker’s ordinary share capital. Shares in both companies rallied.
Elsewhere, telecoms company BT Group was a little weaker after it said third-quarter revenue rose but profit fell as it deals with an accounting scandal at its Italian business, and faces a “challenging” outlook in the UK. For the quarter ended 31 December 2016, revenue was up 32% to £6.12bn, compared to the previous year, while pre-tax profit fell 37% to £526m.
Specialist lender Paragon Group was in the black as it reported first-quarter underlying operating profit of £33.1m, in line with management's expectations and supported by good underlying trends in volumes, margins, cost control and bad debts.
Market Movers
FTSE 100 (UKX) 7,166.38 0.07%
FTSE 250 (MCX) 18,161.75 0.11%
techMARK (TASX) 3,219.98 -0.31%
FTSE 100 - Risers
Tesco (TSCO) 202.40p 7.09%
International Consolidated Airlines Group SA (CDI) (IAG) 502.00p 2.20%
Rio Tinto (RIO) 3,583.50p 1.42%
Old Mutual (OML) 213.80p 0.94%
Fresnillo (FRES) 1,383.00p 0.80%
Johnson Matthey (JMAT) 3,244.00p 0.75%
Marks & Spencer Group (MKS) 343.60p 0.70%
WPP (WPP) 1,858.00p 0.60%
Compass Group (CPG) 1,400.00p 0.57%
National Grid (NG.) 918.40p 0.56%
FTSE 100 - Fallers
easyJet (EZJ) 974.00p -2.11%
AstraZeneca (AZN) 4,218.50p -1.85%
Shire Plc (SHP) 4,368.00p -1.58%
Antofagasta (ANTO) 824.00p -1.55%
Barclays (BARC) 229.10p -1.40%
ITV (ITV) 202.50p -1.22%
Royal Bank of Scotland Group (RBS) 230.10p -1.20%
BT Group (BT.A) 300.45p -0.55%
Prudential (PRU) 1,578.00p -0.54%
Land Securities Group (LAND) 1,001.00p -0.50%
FTSE 250 - Risers
Booker Group (BOK) 206.90p 13.00%
Centamin (DI) (CEY) 146.80p 2.37%
Renishaw (RSW) 2,855.00p 2.15%
Barr (A.G.) (BAG) 509.00p 2.02%
Acacia Mining (ACA) 401.60p 1.90%
Shawbrook Group (SHAW) 244.30p 1.29%
Card Factory (CARD) 252.60p 1.28%
Thomas Cook Group (TCG) 86.50p 1.17%
Hochschild Mining (HOC) 232.00p 1.13%
Zoopla Property Group (ZPLA) 353.90p 1.06%
FTSE 250 - Fallers
Ferrexpo (FXPO) 133.00p -5.14%
Computacenter (CCC) 754.00p -2.90%
Softcat (SCT) 293.30p -2.56%
Euromoney Institutional Investor (ERM) 1,088.00p -2.51%
PayPoint (PAY) 937.00p -2.40%
Ibstock (IBST) 184.60p -2.28%
Dignity (DTY) 2,375.00p -2.10%
Genus (GNS) 1,684.00p -2.09%
McCarthy & Stone (MCS) 164.40p -1.97%
Clarkson (CKN) 2,270.00p -1.52%