London midday: FTSE falls as French political uncertainty dents sentiment
London stocks had fallen into the red by midday on Friday amid a much steeper selloff in Europe, as French political uncertainty weighed on sentiment.
The FTSE 100 was down 0.5% at 8,123.99. Meanwhile, the benchmark Stoxx 600 index was 1.1% lower, France’s CAC 40 was off 2.5% and Germany’s DAX was 1.4% weaker.
Kathleen Brooks, research director at XTB, said: "European markets have underperformed the US this week, the CAC 40 has been under intense pressure and is currently down more than 4% in the past 5 days, followed by Italy’s FTSE MIB which is down more than 2.5% in the past 5 days. The risk is that there could be more volatility as we lead up to next week’s first round of voting in the French parliamentary election.
"Marine Le Pen’s party are expected to get the largest amount of votes, but they may fall short of an outright majority. The risk of a win for Marine Le Pen and a shift in parliamentary power in France to the hard right is fuelling the selloff in French stocks, and the selloff in French banks in particular. While there might be some respite from the selling at the end of the week, we think this will be temporary, as political uncertainty may continue to weigh on sentiment."
In UK equity markets, supermarket chain Tesco jumped to the top of the FTSE 100 as it reported a 3.4% rise in group first-quarter sales, driven by strong volume growth across the UK, Republic of Ireland and Central Europe supported by easing inflation.
Retail sales on a like-for-like basis for the 13 weeks to May 25 came in at £15.3bn as the company said UK market share had increased 52 basis points to 27.6% against its main competitors.
Crest Nicholson surged as it confirmed it had rejected two, unsolicited takeover approaches from Bellway, the latest valuing the group at about £650m.
Under the terms of the latest offer, received on 7 May, Crest shareholders would receive 0.093 new ordinary shares in Bellway for each of their shares. This represents an implied value of 253p per Crest Nicholson share, which is a premium of about 18.8% to the closing share price on Thursday.
"The board of Crest Nicholson evaluated the revised proposal with its financial advisers and concluded that it significantly undervalued Crest Nicholson and its future standalone prospects and was not in the best interests of Crest Nicholson's shareholders," it said. "The board therefore unanimously rejected the revised proposal on 14 May 2024."
Crest Nicholson said Bellway made an initial approach on 25 April, which would have seen shareholders receive 0.089 new ordinary shares.
Bellway was trading down just over 3%.
News of the takeover proposals came just hours after Crest Nicholson slashed its interim dividend payment, said it swung to a loss in the first half and downgraded its profit guidance for the full year, sending its shares tumbling.
On Thursday, the housebuilder cut its adjusted pre-tax profit guidance for the year to the end of October 2024 to between £22m and £29m, from earlier guidance of £45m to £50m, and £41.4m last year.
Burberry was under the cosh as European luxury shares slumped amid worries about the health of demand following a report that some brands are heavily discounting their products in China.
Market Movers
FTSE 100 (UKX) 8,123.99 -0.49%
FTSE 250 (MCX) 20,086.47 -0.54%
techMARK (TASX) 4,782.22 -0.51%
FTSE 100 - Risers
Tesco (TSCO) 310.60p 2.68%
Ocado Group (OCDO) 359.80p 2.48%
BT Group (BT.A) 138.05p 2.26%
Sage Group (SGE) 1,050.50p 1.89%
Fresnillo (FRES) 549.00p 1.86%
Airtel Africa (AAF) 117.20p 1.12%
Vodafone Group (VOD) 69.16p 0.67%
InterContinental Hotels Group (IHG) 8,278.00p 0.63%
AstraZeneca (AZN) 12,464.00p 0.58%
National Grid (NG.) 877.00p 0.48%
FTSE 100 - Fallers
BAE Systems (BA.) 1,327.00p -4.05%
Melrose Industries (MRO) 604.20p -3.64%
Burberry Group (BRBY) 988.20p -3.45%
Barclays (BARC) 198.14p -3.42%
Kingfisher (KGF) 247.90p -3.09%
Intertek Group (ITRK) 4,750.00p -2.86%
Standard Chartered (STAN) 714.20p -2.38%
Rolls-Royce Holdings (RR.) 456.70p -2.37%
NATWEST GROUP (NWG) 301.20p -2.30%
Antofagasta (ANTO) 2,017.00p -2.23%
FTSE 250 - Risers
Crest Nicholson Holdings (CRST) 232.60p 9.30%
W.A.G Payment Solutions (WPS) 66.40p 4.08%
Investec (INVP) 552.00p 3.76%
NextEnergy Solar Fund Limited Red (NESF) 74.85p 2.39%
Ninety One (N91) 163.00p 1.87%
Patria Private Equity Trust (PPET) 545.00p 1.68%
Bakkavor Group (BAKK) 142.00p 1.43%
Fidelity Emerging Markets Limited Ptg NPV (FEML) 678.00p 1.32%
Pacific Horizon Inv Trust (PHI) 624.00p 1.30%
JPMorgan Global Growth & Income (JGGI) 561.00p 0.90%
FTSE 250 - Fallers
Bank of Georgia Group (BGEO) 3,680.00p -4.29%
Bellway (BWY) 2,604.00p -4.19%
Wizz Air Holdings (WIZZ) 2,414.00p -3.13%
Dr. Martens (DOCS) 81.60p -2.97%
Hochschild Mining (HOC) 166.80p -2.91%
Babcock International Group (BAB) 517.00p -2.73%
Hargreaves Lansdown (HL.) 1,039.00p -2.53%
Coats Group (COA) 80.60p -2.42%
Harbour Energy (HBR) 297.00p -2.37%
JPMorgan European Discovery Trust (JEDT) 455.00p -2.36%