The FTSE 100 was firmly higher on Thursday as investors reacted to Shell’s statement on BP takeover speculation and London played catch-up with US equities.
“A sense of calm has descended on markets this morning as high-stakes drama on the global stage took the night off,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.
London’s leading index rose 0.5% as UK stocks rose in line with a move to the upside in US stocks. Nvidia hit records overnight and became the world’s largest company, overtaking Microsoft, as the NASDAQ hit record highs. The S&P 500 is within touching distance of record highs.
London received an additional boost to sentiment in the form of M&A hopes as reports emerged Shell was eyeing up BP, only for Shell to shut any speculation down via a statement issued on Thursday. Nonetheless, takeover talk gripped the market and investors piled into natural resource companies that may be targets for a bid.
“Speculation last night around a BP bid effectively set the stage for the UK stock market to rocket today. Instead, Shell has spoiled the party and the blue-chip index is static,” said Russ Mould, investment director at AJ Bell.
“That won’t stop the market from continuing to speculate about who else might want to buy the FTSE 100 energy giant. It might also encourage investors to dust off the M&A playbook and think about who else could be a takeover target. That might explain why Anglo American’s shares were among the top risers on the FTSE today.”
Anglo American was 5% higher at the time of writing. Glencore and Antofagasta rose over 3%.
Anglo American has been the subject of takeover speculation and approaches for some years, recently spinning off a business unit to help fight off future interest. The FTSE 100’s weighting towards miners meant a hint of M&A fever in the sector helped lift the index.
A mild risk-on tone to trade had developed in afternoon trade with retailers, miners and financials leading the way higher.
British American Tobacco was the FTSE 100’s top faller after trading ex-dividend.