LONDON: UK shares opened higher on Monday, buoyed by a jump in ARM Holdings’ after Japan’s SoftBank Group Corp agreed to buy the British chip designer.
SoftBank agreed a deal worth 24.3 billion pounds ($32.2 billion), sending ARM Holdings shares up 42.9 percent to a record high.
“An increase in inbound M&A was one of the obvious consequences of Brexit and weakened sterling but few expected it to manifest itself so quickly or at so large a scale,” Dan Ridsdale, analyst at Edison Investment Research, said in a note.
ARM’s rise accounted for all of the gains on the UK’s blue-chip FTSE 100 index, which was up 0.3 percent at 6,690.09 points by 0818 GMT.
Mining stocks were the biggest losers after the price of copper extended falls on a stronger dollar, which makes dollar-denominated commodities more expensive for holders of other currencies.
BHP Billiton, Anglo American, Rio Tinto , Glencore and Antofagasta were all down between 1.3 percent and 2.1 percent.
Travel stocks were also under pressure after a failed coup in Turkey.
Tour operator TUI fell 1.7 percent, and mid-cap Thomas Cook dropped 2.4 percent.
“It is just one thing after another, really. Every time you think the sector might be free of problems, then another one comes along,” Chris Beauchamp, senior market analyst at IG, said.
“I think the fact that the coup didn’t last very long, the fact you haven’t got … any further fighting will perhaps cushion the impact. But people will look at Turkey and think, ‘well, why don’t I go elsewhere?'”
The FTSE 100 index is up around 7.7 percent so far this year, having hit a year high last Thursday. It has recovered 5.6 percent from a slump after Britain voted to leave the European Union on June 23.
Copyright Reuters, 2016
Courtesy : BRecorder