FTSE 100 up as Morrisons takeover battle brews

Lucy Harley-McKeown
File photo dated 19/06/20 of a sign for the Morrisons. Morrisons has revealed that profits were cut by more than half over the past year after it was hit by �290 million in pandemic-related costs. Issue date: Thursday March 11, 2021.
The supermarket chain was in focus as Apollo said it may look to make an offer. Photo: PA (PA)

European markets were largely quiet on Monday, with a takeover battle for supermarket chain Morrisons (MRW.L) enlivening what was an otherwise dull day.

The FTSE 100 (^FTSE) closed up 0.6% in London as investors digested news of a brewing takeover battle for Morrisons. The supermarket group's share price jumped more than 11% on Monday after private equity giant Apollo revealed it was considering making a bid for the supermarket chain.

On Saturday, Morrisons had agreed a £6.3bn takeover by a consortium led by Fortress Investment Group. Apollo's intervention suggests the fight for control could just be beginning.

At the close, Paris's CAC (^FCHI) had moved 0.3% higher and Germany's DAX (^GDAXI) was up 0.1%.

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"Trading volume in the market is expected to remain on the low side as the US stock market is closed for a public holiday," said Naeem Aslam, chief market analyst at AvaTrade. Markets in the US were closed for Independence Day.

"Investors in Europe are likely to pay more attention to the ongoing trend in the equity market, which has been very much to the upside," Aslam said. "For instance, the S&P 500 is on its longest winning streak since August, with gains in seven consecutive trading sessions."

Stocks were mixed overnight in Asia. The Nikkei (^N225) closed down 0.6%, Hong Kong's Hang Seng (^HSI) also glided 0.6% lower, while the SSE Composite Index (000001.SS) ticked up 0.3%.

Oil prices were volatile amid rifts within The Organization of the Petroleum Exporting Countries (OPEC) oil cartel. The UAE has reportedly pushed back against Saudi plans to extend a pact to cut oil output into 2022, according to Reuters.

"All told, oil prices have been trading like a runaway train lately, but it’s becoming harder to envision massive gains from here," said Marios Hadjikyriacos, investment analyst at XM. "More supply is coming back online both from OPEC and US shale producers, while the demand outlook is looking shaky with the Delta covid variant spreading like wildfire."

Brent crude futures (BZ=F) fell in early morning trade but ended the day up 1.3%, hitting $77.18.

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