LONDON MARKETS: U.K. Stocks End At 4-month High As Burberry, Paddy Power Rally
17 May 2018 - 02:47AM
Dow Jones News
By Sara Sjolin and Carla Mozee, MarketWatch
Smurfit Kappa underscores rejection of takeover approach
U.K. stocks advanced Wednesday, finishing at a four-month high
as shares of Burberry and Paddy Power Betfair climbed after
well-received corporate updates.
The beaten-down pound, which has struggled in recent weeks, also
helped lift the London benchmark.
What are markets doing?
The FTSE 100 index rose 0.2% to 7,734.20, its highest close
since Jan. 16, according to FactSet data. Wednesday's win was the
index's second in a row.
The pound traded at $1.3477, down from $1.3505 late Tuesday in
New York. Sterling has dropped almost 6% against the dollar over
the past month, hurt in part by a run of weaker-than-expected
economic data. A weaker pound tends to boost the FTSE 100 as the
index's components make the bulk of their earnings overseas, with a
softening sterling lifting revenues when converted back into the
U.K. currency.
What is driving the market?
In the absence of any major macroeconomic data releases traders
instead looked to the latest corporate news.
Shares of Paddy Power Betfair PLC jumped 6.3% to top the FTSE
100 after the gambling company confirmed it's in talks about a
potential merger of its U.S. business with FanDuel Inc
(http://www.marketwatch.com/story/paddy-power-fanduel-in-talks-about-us-business-2018-05-16).
Paddy Power shares have surged 13% this week, boosted by U.S.
Supreme Court ruling on Monday that could open for sports betting
around the country.
The company in March SHYannounced its then-CEO's resignation and
warned of a revenue drop, spurring a big selloff that bulls viewed
as overdone
(http://www.marketwatch.com/story/its-half-off-for-this-hewlett-packard-spin-offs-stock-why-thats-still-not-a-great-deal-2018-03-24).
Read:Here's a new opportunity for investors to make money from
sports betting
(http://www.marketwatch.com/story/heres-a-new-opportunity-for-investors-to-make-money-from-sports-betting-2018-05-15)
Meanwhile, shares of Burberry Group PLC (BRBY.LN)(BRBY.LN) leapt
3.6% after the luxury goods company reported a rise in full-year
profit
(http://www.marketwatch.com/story/burberry-to-start-150-million-share-buyback-2018-05-16)
and said it would start a new 150 million pound ($202.8 million)
share buyback.
More broadly on the global financial scene, traders watched the
return of geopolitical tensions after North Korea threatened to
call off a historic meeting
(http://www.marketwatch.com/story/north-korea-threatens-to-call-off-us-summit-if-washington-insists-on-denuclearization-2018-05-16)
with the U.S. A senior North Korean official said Pyongyang doesn't
want a coming summit to focus solely on denuclearization. U.S.
President Donald Trump is scheduled to meet North Korean leader Kim
Jong Un on June 12 in Singapore.
Other stock movers
Shares of Micro Focus International PLC (MCRO.LN) jumped 6.2%
after the software group said it expects revenue for the first
fiscal half of 2018 to be better than forecast due to an unusually
large license deal of about $40 million that closed earlier than
expected.
Smurfit Kappa Group PLC (SK3.DB) led losses on the main
benchmark, down 5.1% after the Irish packaging company reiterated
its rejection
(http://www.marketwatch.com/story/smurfit-kappa-continues-to-reject-approach-from-ip-2018-05-16)
of a 8.9 billion euro ($10.6 billion) takeover approach from
International Paper Co. (IP). Smurfit Kappa also said it welcomes
an Irish takeover panel ruling that said International Paper has
until June 6 to make a binding offer or walk away.
"The board continues to believe that the best interests of the
group's stakeholders are served by pursuing its future as an
independent company," said Smurfit Kappa.
Mondi PLC (MND.JO) climbed 3.3% after the paper and packaging
company said underlying operating profit rose 15%
(http://www.marketwatch.com/story/mondi-quarterly-underlying-profit-rises-2018-05-16)
in the first quarter and its business outlook remains positive.
(END) Dow Jones Newswires
May 16, 2018 12:32 ET (16:32 GMT)
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