A relatively quiet day in terms of market movement looked set to pave way for the FTSE 100 to end the week on a high, slightly below 2016 highs. The blue-chip index touched on 6,235 points during morning trading before paring back to close down -0.2%. Standard Chartered and Sports Direct galloped to the front of the field with more than 8% gains in late afternoon trading.
Following the Fed’s decision on Wednesday to keep rates on hold, surprising many with a more cautious statement and outlook on the global economy, the US dollar fell sharply against both the euro and British pound. This led to commodities rising, with Gold extending its year-to-date gains. Today though, the dollar has reversed some of those losses, gaining 0.2% and 0.1% vs the euro and Japanese Yen respectively.
Late afternoon, news broke regarding the Home Retail takeover bid. Up until today it has been a two-horse race between South African company Steinhoff International and the UK’s second-biggest supermarket chain, Sainsbury’s. Under UK takeover rules, both parties had until 17:00 GMT to make a firm offer, or walk away. As a quick summary, Steinhoff had previously approached Home Retail Group with a possible cash offer whilst Sainsbury’s had made a cash and shares proposal. However, today, Steinhoff announced that they would no longer be perusing the takeover, sending Home Retail Shares down by more 10% towards the end of trading, now leaving the path open for Sainsbury’s to confirm plans to big for the Argos owner. (Note: Home Retail Group own both Argos and Homebase but Homebase have been sold to Australian DIY/garden centre Bunnings for £340m, so in essence, the Sainsbury’s big approach is for Argos alone).