The FTSE 100 surged on Monday in a broad based rally led by IAG and the UK banks as markets braced for a busy week of central bank action.
International Consolidated Airlines was the FTSE 100’s top riser on reports they could be eyeing easyJet as a takeover target. IAG shares were up over 5% at the time of writing.
“Reports that EasyJet could be a takeover target for International Consolidated Airlines make perfect sense,” said AJ Bell investment director Russ Mould.
“The pandemic has created concerns about the future of business travel, with companies globally realising they don’t need to hold so many meetings in different locations. It’s far easier, cheaper and more environmentally friendly to hold many conversations over Teams or Zoom than get on a plane.”
The Times reported IAG could target easyJet and Portuguese TAP Air Portugal to add to their portfolio of airlines which includes Iberia and British Airways.
UK Bank Windfall Tax
A week after UK banks reported Q3 earnings, Natwest and Lloyds were back under the microscope as investors weighed the potential of a surcharge on UK banks in the upcoming Autumn Statement.
Speculation had grown Sunak and Hunt would again raid banking profits, but reports over the weekend suggested the windfall tax could be less than previously thought.
NatWest and Lloyds were up 4.6% and 2% respectively with NatWest bouncing back from a terrible session on Friday.
Centrica upgrades
Centrica was among the best performers after the utilities company received favourable upgrades from analysts at Jefferies, Barclays and Citigroup.
Barclays analysts were the most optimistic on Centrica share price with a price target of 144p. Centrica shares were 5$% higher at 76p at the time of writing.
Central Banks
Central banks are back in focus this week with markets preparing for the Federal Reserve set to meet on Wednesday and the Bank of England issuing there latest interest decision on Thursday.
Economists are predicting the Bank of England will hike rates 75 bps to 3%.