European equities made an unconvincing start to the week, while stocks in New York regained poise, after starting Monday on the back foot following poor US data.
London’s FTSE 250 ended higher, despite share price slumps for Asos and Wood Group. The dollar struggled for traction, meanwhile.
The FTSE 100 index ended up 23.08 points, or 0.3%, at 7,777.70. The FTSE 250 rose 70.38 points, or 0.4%, at 19,258.75, while the AIM All-Share lost 2.11 points, or 0.3%, at 814.85.
The Cboe UK 100 rose 0.3% at 777.26, the Cboe UK 250 ended 0.2% higher at 16,826.47, and the Cboe Small Companies inched up 0.1% at 13,627.97.
In European equities on Monday, the CAC 40 in Paris closed up 0.1%, while the DAX 40 in Frankfurt edged marginally higher.
In London, Anglo American rose 1.8%, Antofagasta added 1.6% and Glencore climbed 1.4%. Miners rose on hopes of stimulus boosting the Chinese economy. China is a key buyer of minerals.
In New York, the Dow Jones Industrial Average was flat at the time of the closing bell in Europe. The S&P 500 was up 0.1% but initially traded lower, while the Nasdaq Composite rose 0.4%.
Business activity in the state of New York weakened this month, according to the latest Empire State manufacturing survey. The headline index slumped 43 points to negative 31.8 in May from 10.8 in April.
It had been expected to suffer a lesser fall to negative 2.5 points, according to consensus cited by FXStreet.
Focus in New York this week will be on the health of the US consumer, with retailers Ross Stores and Walmart reporting first-quarter results on Thursday, after DIY supplies firm Home Depot on Tuesday.
The earnings will come in the wake of a less-than-stellar US consumer confidence reading on Friday. The preliminary reading of the University of Michigan’s tracker sank to 57.7 points, missing expectations for it to stay close to April’s tally of 63.5.
Microsoft rose 0.2%, while Activision Blizzard climbed 0.9%.
The EU gave the green light to Microsoft’s takeover of the video game company, only weeks after UK watchdogs put the deal in doubt.
The European Commission said the commitments offered by Microsoft ‘fully address the competition concerns identified by the commission and represent a significant improvement for cloud gaming as compared to the current situation’.
Elsewhere in the M&A space, Australian gold miner Newcrest Mining agreed to a takeover by New York-listed Newmont in a deal worth around $19 billion.
By swallowing up Newcrest, Newmont will cement its position as the world’s biggest gold producer, with operations extending across North and South America, Africa, Australia and Papua New Guinea.
Newcrest rose 1.5% in Sydney on Monday. Newmont was up 1.4% in New York.
In London, Wood Group slumped 34%.
Apollo Management confirmed it does not intend to make a takeover offer for the company.
In April, the energy sector-focused engineering and consulting business said it would engage with Apollo to see if a firm takeover offer could be made on the same terms as its previous proposal. In early April, Apollo had proposed a potential offer of 240 pence per share in cash - a 59% premium to Wood’s share price at the time.
On Friday, fellow London-listed firm THG announced potential takeover discussions with Apollo had collapsed. THG lost another 3.5% on Monday.
Asos tumbled 21% on the feeling that it may need to go cap in hand to investors to bolster its finances.
‘Given the ongoing restructuring and cost savings initiatives, it is becoming increasingly evident that Asos will need to seek further capital infusion to support its long-term viability, in our view,’ analysts at Shore Capital Markets commented.
The pound was quoted at $1.2515 at the time of the London equities close, higher compared to $1.2465 at the close on Friday. The euro stood at $1.0871, higher against $1.0857. Against the yen, the dollar was trading at JP¥136.07, up from JP¥135.39.
The US Federal Reserve may have to continue raising interest rates to bring down inflation, the president of the Minneapolis Fed said, opening the door to another hike next month.
‘The labour market is still hot,’ Neel Kashkari – a member of the Fed’s rate-setting committee – told a business conference in Minnesota.
Kashkari’s comments put him among the members of the US central bank’s rate-setting committee suggesting an 11th interest-rate hike may yet be necessary at its next meeting on June 13-14.
The US debt ceiling deadlock will be in focus this week. US President Joe Biden said on Sunday he remains ‘optimistic’ about finding an agreement with his Republican opponents to raise the US debt limit and avoid a default, which his administration warned would cause ‘catastrophic’ consequences.
Congressional Republicans are demanding budget cuts in exchange for lifting the US borrowing limit, while the White House has insisted for months that the nation’s credit should not be up for negotiation.
Gold was quoted at $2,015.35 an ounce late Monday afternoon in London, higher against $2,010.46. Brent oil was quoted at $75.26 a barrel, up from $74.87 late Friday.
Tuesday’s economic calendar has a eurozone gross domestic product reading at 1000 BST. The reading will come after the European Commission boosted its 2023 economic growth outlook for the single currency area. The commission raised its growth outlook by 0.2 points to 1.1%.
Elsewhere on Tuesday, there is also UK unemployment data at 0700 BST.
The local corporate calendar has annual results from fast fashion firm boohoo, telecommunications firm Vodafone and property company Land Securities. Baked goods maker Greggs reports a trading statement.
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