The FTSE started the day on a positive note and proceeded to gain a solid 1.8% in the course of the day, boosted by M&A activity involving food delivery firm Just Eat (LON:JE) and the London Stock Exchange’s (LON:LSE) expansion into the data business.
Just Eat shares rallied more than 24% as the company is in the process of being bought by Amsterdam-based Takeaway com (AS:TKWY), which plans the creation of a competitor for on-line food businesses Uber (NYSE:UBER) Eats and Deliveroo.
London Stock Exchange also bounced up 15% after it announced plans to take over of Thompson Reuters-owned Refinitiv and to finance the acquisition with the issue of new shares.
UK banks are holding up surprisingly well given that some are being sued by investors over allegations they have rigged the global foreign exchange market. In a move that resembles more the US legal environment than the one in the UK, the Competition Appeals Tribunal filed a £1 billion class action lawsuit against Barclays (LON:BARC), Royal Bank of Scotland (LON:RBS), UBS, Citigroup (NYSE:C) and JPMorgan (NYSE:JPM).
Only several months ago European regulators fined the same group of banks €1 billion for manipulating foreign currency markets between 2007 and 2013. However, all of the UK banks are trading in the black today, attracting a solid volume of trade.
Sterling falls to 2 ½ year low on verbal ping-pong with the EU
The day went from bad to worse for the pound which ended up trading down 1.03% against the dollar in the afternoon trade and lost 1.07% against the euro as Boris Johnson’s new Cabinet started a war of words with the EU, saying that the EU would have to change its “stubborn” stance on Brexit if it wanted to avoid a no-deal scenario.
Sterling’s strong reaction reflects investors’ concerns that a no-deal Brexit would be very damaging for UK businesses and could affect London’s position as one of the top global financial markets.
Feeding off the pound’s weakness the dollar rose to a two-month high against a basket of currencies, consolidating gains it made late last week. The next big mover for the market will be the Fed’s interest rate decision on Wednesday, expected to be a cut, and the accompanying notes which will shed some light on whether this will be the first of a number of cuts this year, or a one off.