Monday, 30 January: Ahead of a fairly busy week for data across the globe, indices were largely on the back foot headed by the Nikkei 225, as it closed 0.51% lower before European markets opened along similar lines. The FTSE 100 pared further gains seen in the early weeks of January, closing -0.92%. Indices were sent lower, along with the US dollar against most developed market currencies, with some of the larger slips against sterling and the yen. This global shift was provoked by Trump’s executive order to halt the entire refugee program for 120 days, banning all Syrian refugees until further notice and suspending entry for nationals from seven Middle Eastern/African countries for 90 days. It seems that market participants may be spooked slightly regarding Trump’s policies, after markets spent the best part of December and January rallying higher on a wave of optimism regarding US aggregate demand stimulus. Is the reality of a Trump presidency finally hitting home, given his stance on many polarising topics has not yet weakened? Will investors now be more fearful of a world with a protectionist United States and the consequences for global and US growth? Its anyone’s guess. As we went into the London close, indices across the pond were trading between 0.80-1.00% lower on the news.
On home soil, the aforementioned political factors led the primary index lower in what was a subdued day of trading. One of the most noteworthy market moves was a potential Vodafone tie-up in India, though it did little to move the stock price(+2.14%). The mobile telecoms company announced it is in talks to merge its Indian unit with the country’s third largest operator and Vodafone rival, Idea Cellular Ltd. An agreement would result in spinning-off the Vodafone India business, but the firm conceded a deal is far from done as yet.
Tesco, slipped lower(-1.40%) in the aftermath of issuing news of a surprise takeover of food wholesaler Booker Group. The supermarket traded 9.3% higher on Friday as it announced a £3.7bn cash & shares takeover of the mid-cap wholesaler, a deal which will combine the UK’s largest supermarket with its biggest cash & carry company.