Monday, June 17: Banking stocks led the FTSE 100(+0.16%), and Europe higher at the open though negative sentiment directed towards Airlines restrained gains across the board ahead of Fed & BoE meetings in the week ahead.
Babcock(+1.46%) was in the green this morning as it announced it received an offer from Serco in January to buy the company, but rejected it. The offer was described as “highly preliminary” and the Board of Babcock carefully considered the proposal, but rejected it, concluding there was little strategic merit in the tie-up. Further detail in The Times today revealed that industry sources said Serco twice approached Babcock over the Winter to commence talks.
A profit warning for DAX listed airline Lufthansa(-11.97%) spurred a negative read-across for UK listed Easyjet(-4.37%) Wizz Air(-3.68%), Dart Group(-1.73%) and IAG(-2.69%)as it described tough trading conditions for Eurowings. Sales were noted as falling within the budget arm of the business as price competition intensified between incumbents, with higher fuel costs also proving to be a risk to margins.
Chancellor Phillip Hammond will launch the London-Shanghai Stock Connect on Monday, this will enable UK-listed companies to become dual-listed on both Shanghai & London Stock Exchange. This will allow trading of UK-listed companies in Shanghai via depositary receipts opening up UK companies to foreign investors and allowing companies from each country to raise capital in the other.
European equities were mixed at the close, with the FTSE 100 +0.12%, the CAC 40 +0.43% and the DAX 30 -0.09%.