Spurned takeover offers have taken some of the gleam off stock markets. Bookmaker William Hill has turned down a £3.6bn offer from 888 and Rank while Peppa Pig-owner Entertainment One has snorted at ITV’s £1bn bid.
Germany’s DAX index has pulled back after returning to a “bull market” as investors switch to fixed income, notably UK gilts, where yields have dropped to a fresh record low.
The extent of the demand for UK government bonds is evident from the refusal of institutions to sell enough to the Bank of England to meet its asset purchase target of £1.17bn on Tuesday. The Bank of England released a statement on Wednesday saying it will make up the shortfall in the second-half of the program. The British pound has rebounded back above 1.30 to the US dollar because the failed reverse-auction undermines the entire viability of the BOE’s new QE program, reducing the scope for further devaluation.
Speculation that ITV (LON:ITV) will mount another offer for Entertainment One but that Rank Group (LON:RNK) may give up on its joint purchase of William Hill with 888 Holdings has sent both shares to the top of the FTSE 250, helping mid-caps outperform blue chips.
Oil and Gas firms were the biggest drag on the FTSE 100. Oil prices snapped a four-day winning streak on Tuesday and have extended losses on Wednesday. Saudi Arabia is said to have told OPEC that its output hit new record high in July, adding to concerns of over-supply.
US stocks look set for a mixed open after Walt Disney beat earnings and revenue expectations thanks to a strong performance from its film studio while also announcing an investment in BAMTech, a video streaming service. Earnings reports are expected from Ralph Lauren, Michael Kors and Wendy’s on Wednesday.
USA pre-opening levels
S&P 500: 1 point higher at 2,182
Dow Jones: 12 points lower at 18,521
Nasdaq 100: 2 points higher at 4,797
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