Tuesday, March 20: UK indices marched higher with the FTSE 100 lifted by finance companies and a rebound in commodity stocks following yesterday’s slump. The FTSE 250 was lifted by yet another takeover offer as tyre manufacturer Michelin seeks to branch out into servicing the mining industry. Brent crude prices edged up to intraday highs of $67.85/bbl, following rising tensions in the Middle East. Gold received bids as the markets awaited the latest guidance regarding US monetary policy from the Federal Reserve later today.
Fenner(+24.85%) was subject to an all cash bid of 610p per share after the close in London last night, valuing the engineering company at £1.2bn and a one-third premium to the volume weighted share price in the three months prior to Monday. Fenner directors have unanimously recommended that shareholders approve the deal, which looks set to be much less drama than Melrose’s battle to acquire GKN. The acquisition enables Compagnie Generale des Etablissements Michelin to expands its offering to mining industry clients, whilst broadening its engineered materials division.
The latest data regarding UK inflation highlighted a slowdown in price pressures for the month of February. Consumer prices were recorded as rising 2.70% on the year in February, relative to a 3.00% rise in February. The decline emerged as price pressures emanating from petrol prices subsided, along with weaker gains in food prices and other good compared with a year prior. Price pressures also relented at the factory gate, as February’s PPI came in at 2.60% on the year, slipping from a 2.80% read in January. Raw materials costs were recorded as rising at 3.40%, versus a 4.50% rise in January.
Across Europe, indices were up at the close with the FTSE 100 +0.26%, the DAX 30 +0.74% and the CAC 40 +0.57%.