Market update: FTSE 100 and oil price steady, bid target Spectris up 15%
09:55 , Graeme EvansOil prices and the FTSE 100 index today held firm as European markets gave a calm response to the US strikes on Iranian nuclear facilities.
London’s top flight benchmark stood 8.55 points lower at 8766.10, which compared with initial expectations for a fall of about 0.5%.
Brent Crude futures traded above $79 a barrel in Asia trading but later fell back to $77 as markets weighed up the chances of Iran closing the Strait of Hormuz, which provides passage for about a fifth of global oil and gas flows.
Airline stocks were impacted by ongoing Middle East uncertainty as easyJet fell 7.4p to 511.6p and British Airways owner IAG slipped 2.2p to 310.9p.
Other fallers came from the retail sector as Marks & Spencer dropped 4.4p to 357.5p, Primark owner Associated British Foods slipped 19p to 205788p and JD Sports Fashion reversed 1.3p to 71.6p.
BP added 4.25p to 388.95p and Shell lifted 15.5p to 2698.5p, while distribution services business Bunzl rose 30p to 2302p ahead of a trading update tomorrow.
Healthcare business Convatec added 7p to 290p at the top of the FTSE 100 index after JPMorgan placed the stock on positive catalyst watch.
High-tech measurements firm Spectris jumped 15% or 494p to 3776p in the FTSE 250 index, above the 3763p or £3.8 billion offer price tabled today by private equity firm Advent.
Rival KKR set the scene for a takeover tussle after it said it was in the “advanced stages of due diligence” and arranging financing for a potential counter bid.
Marginal PMI rise eases UK recession fears
09:45 , Graeme EvansPrivate sector activity today showed an upturn in June after S&P’s composite PMI reading for the UK stood above the no-change 50 for the second month running.
The score of 50.7 rose from 50.3 the previous month and compared with expectations of 50.5, but still only points to a marginal pick-up in activity.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said: “Although business conditions have continued to improve since April’s downturn, quelling recession fears, growth of business activity remains disappointingly lacklustre.”
Today’s release showed the initial estimate of services PMI at a three-month high of 51.3 and manufacturing at a five month high of 47.7.
PHP steps up Assura bidding war
08:36 , Graeme EvansNHS landlord Assura has backed an improved takeover offer amid the continued bidding war for the FTSE 250-listed firm.
Assura said that its board has agreed a £1.79 billion offer from fellow mid-cap stock Primary Health Properties (PHP).
PHP had laid down a £1.68 billion bid last month but was outbid by US private equity firm KKR, having valued the business at £1.7 billion.
Spectris backs £3.8bn takeover, KKR mulls rival bid
08:32 , Graeme EvansAn ongoing takeover tussle for FTSE 250-listed industrial group Spectris today lifted its shares by another 15% or 484p to 3766p.
The surge came after the provider of handheld instruments used in materials analysis backed a £3.8 billion bid by US private equity firm Advent International.
Advent has tabled 3763p a share but Spectris rose beyond this price after private equity giant KKR set the scene for a possible takeover tussle.
It said, soon after the deal with Advent was announced, that it was in the “advanced stages of due diligence” and arranging financing for a potential bid.
KKR added it has been “engaging constructively” with the Spectris board since first making an approach to the firm on June 2.
FTSE 100 opens lower, Brent Crude price steady
08:20 , Graeme EvansFinancial markets have given a calm response to events in Iran after the FTSE 100 index opened about 0.2% or 17.47 points lower at 8757.18.
Brent Crude futures have also settled near to their opening mark at just below $78 a barrel, having topped $79 a barrel at one point in Asia trading hours.
Airline stocks IAG and easyJet fell by about 2% in the FTSE 100, with BP and Shell shares up 2% and 1% respectively.
Richard Hunter, head of markets at Interactive Investor, said: “There is tension but not trauma as investors monitor developments in the Middle East.”
Oil price warning over Strait of Hormuz threat
07:32 , Graeme EvansOil prices have risen amid fears that Iran may attempt to close the Strait of Hormuz, which provides passage for about a fifth of global oil and gas flows.
Peel Hunt said: “An attempt by Iran to attack or mine the Strait would represent a much more severe economic risk scenario, causing a significant global supply and price shock, depressing global GDP and pushing up inflation.
“That said, it is worth noting that China is heavily dependent on the Strait of Hormuz for its trade.
“If Iran tries to block that stretch of water, it risks an all-out war with the most powerful country in the world (the US) and badly antagonising the second most powerful (China).”
In terms of the economic impact, Deutsche Bank said the US has become a net energy exporter in the last few years so any negative impact would be through deteriorating financial conditions or through higher for longer interest rates.
The bank added: “For Europe though, the impact is potentially more serious. Every $10/bbl increase in oil has the potential to add a quarter of a percent to HICP inflation within a quarter and if sustained 0.4 percentage points within a year.”
FTSE 100 seen lower as oil tops $78 a barrel
07:03 , Graeme EvansBrent Crude futures rose today amid fears of Iranian retaliation in the wake of America's bombing of three of its nuclear facilities.
The oil price stood at its highest level since January at $78.31, an increase of about 1.4% in this morning’s dealings.
The FTSE 100 index is forecast to open about 0.35% lower, having lost 17.15 points to close last week at 8774.65.
Wall Street posted a mixed performance on Friday while leading Asia benchmarks including the Hang Seng index are higher.
