(Businesshala) – London’s FTSE 100 index rose higher on Monday in support of heavyweight oil stocks and gains in AstraZeneca, while private equity firm Clayton, Dubillier & Rice (CD&R) won a bid for the company after Morrison dropped it.
Morrisons fell 3.7% after US private equity firm CD&R won the auction for Britain’s fourth-largest supermarket with a bid of 7 billion pounds ($9.5 billion), its worst since September last year. There is a single-day drop, which is marginally above its 285 pence per share offer. , already recommended in August.
Peer Sainsbury’s rose 3.9% on hopes that SoftBank’s Fortress Investment could turn its attention to the company after losing the bidding war to Morrison.
The blue-chip FTSE 100 index is up 0.1%, with AstraZeneca providing the top boost, up 1%, after breast cancer drug, Enhartu, received a breakthrough medical designation.
Weakness in financials including HSBC, Prudential and Lloyds Group limited further gains for the index.
After Barclays raised the price target, the oil sub-index rose 1.2%, as heavyweights BP and Royal Dutch Shell rose 0.8% and 1.3%, respectively.
The domestically focused mid-cap index fell 0.5%, led by a fall in consumer discretionary stocks.
The FTSE 100 is up about 8.5% so far this year on accommodative central bank policies and optimism about reopening.
However, the index is down 2.3% from this year’s high, as inflation risks and signs of slowing local and global economic growth weighed on investor sentiment.
“Inflation is dampening market sentiment, with longer-term fears of above target prices bringing expectations of a dramatic revaluation in monetary policy expectations,” said Joshua Mahoney, senior analyst at IG Group.
“Investors are increasingly fearful that the November and December periods are characterized by a supply crunch and high prices.”
Among other stocks, online trading platform Plus500 rose 2.3% after raising its forecast for the second time in less than three months.
(Graphic: Banks reduce high returns – )