The FTSE 100 ground out modest gains early on Monday as it rebounded from a sell off late last week.
The gains in London were in stark contrast to a tumultuous Asian session which saw interest rate fears rock equities.
“Asian markets slumped heavily as investors continued to react to last week’s US Federal Reserve meeting which has curdled sentiment by raising the prospect of earlier than expected rate rises,” said AJ Bell investment director Russ Mould.
“Having scaled the highest peaks in recent months, Japan’s Nikkei index notched up a chunky fall of more than 3% on Monday.”
“The FTSE 100 notched up a far more modest fall, having already endured a fair bit of damage at the end of last week linked to concerns about rate rises.”
Miners were among the losers on Monday as Asian concerns seeped into commodity prices.
“Any attempt at a rally in stock markets is going to struggle given the lack of news, and for the FTSE 100 some dollar weakness would be good to lift mining stocks from their current poor run,” said Chris Beauchamp, Chief Market Analyst at IG.
Rio Tinto was around 1% weaker and BHP barely in the green, up 0.2% at midday in London.
Morrisons Takeover
Morrisons shares jumped 30% in early trade on Monday following a £5.5bn takeover offer from a US private equity group.
Commenting on Morrison’s price action in Monday, AJ Bell investment director Russ Mould noted the Morrison’s share price was higher than the offer price, suggesting the market was preparing for a battle over Morrisons.
“The shares traded at 235p early on Monday which is higher than that 230p proposal from CD&R. The market therefore seems confident that the suitor will have to raise its offer price or someone else might step into the game and we’ll see a bidding war.”
“Amazon has long been touted as a potential buyer for Morrisons to help give it a much stronger foothold in the UK grocery markets so that’s an obvious name to watch.”
