M&A activity boosts FTSE

Yet more pharma mergers and acquisitions and a successful debut from TSB have helped the FTSE 100 to a third successive day of gains.

TSB logo
Source: Bloomberg

A bit of M&A excitement has been just the ticket to enliven trading on what may otherwise have been something of a lacklustre end to the week. Something about UK pharma firms seems to be irresistible to American companies, as yet another bid for Shire is rebuffed by the company. However, the 14% rise in the shares indicates that there are still plenty of people prepared to expect a fresh bid in due course.

TSB’s reincarnation as a listed entity has gone well, and the strong debut combined with a decision by Lloyds to sell more shares than expected will give the IPO a fizz that so many recent ones have lacked. Perception is everything, so a good performance on day one puts the shares in a commanding position for future trading.

For the FTSE 100, this week has seen a remarkable turnaround, and leaves open the possibility that, this time, we can break 6880. 

US indices will need to find some remarkable strength if they are to finish in anything other than quiet fashion this afternoon. Without much economic news, Iraq will take centre stage again, and the spectre of Vietnam looms large here as military ‘advisers’ are despatched. ‘Advisers’ tend to turn into ‘troops’, in the way of geopolitics, but the major worry is still what the crisis will do to oil prices. Rises of $40-$50 in oil are being bandied about, but common sense suggests that the stabilisation of oil supplies will be a priority for all concerned. Markets aren’t known for their common sense however, so oil concerns will drive sentiment in coming weeks.

Ahead of the open, we expect the Dow Jones to start 15 points lower at 16,906.

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