Tuesday, May 28: Markets started the day in the green in London, fuelled by weaker sterling(against USD & EUR currencies) following strong gains for the Brexit party in Europe’s parliamentary elections. Asian markets found themselves in the green in early trade, though on low volumes following bank holidays for the UK & US.
Miners initially lifted the FTSE 100 higher due to rising iron ore prices in China, though the primary index slumped towards the close, led by British American Tobacco. Iron ore prices hit record highs amidst concerns of dwindling stocks and worries of another Brazilian mine collapse. Rio Tinto(+2.34%) and BHP(+2.00%) dragged the index higher in a quiet day for company news.
Following PM May’s announcement to step down from No. 10 in early June, wins for the Brexit party prompted further selling in Brexit-sensitive stocks such as Housebuilders and retailers. Galliford Try(+3.62%) saw gains despite facing adverse sentiment, after issuing a statement on a proposed takeover for its Housing Unit(Linden Homes) from Bovis Homes. Bovis issued a statement to the effect that it made a proposal on May 8 for a £950m consideration together with a £100m 10-year debt private placement to be satisfied by a share issue to Galliford’s shareholders. This proposal followed preliminary discussions with Galliford Try. Galliford Try rebuked the offer after considering advice from its financial advisor, Rothschild & Co. stating the bid didn’t fully value the Linden Homes division, its partnerships and regeneration divisions; Bovis Homes’ share price(+0.37%) was little changed on the news.
Following bank holidays in the UK & US European equities were lower today, with the FTSE 100 -0.12%, the CAC 40 -0.44% and the DAX 30 -0.37%.