LONDON MARKETS: British Stocks Enjoy Best Day In Six Months On Pound Collapse, Merger Buzz

By Steve Goldstein, MarketWatch

British stocks on Monday enjoyed their best single-day performance in six months as the pound collapsed on concerns the U.K. will leave the European Union without an agreed-upon deal.

The FTSE 100 rallied 1.82% to 7,686.61, the best gain of the major European stock markets (http://www.marketwatch.com/story/europe-stocks-nudge-up-on-ma-and-earnings-news-as-lse-surges-while-heineken-fizzles-2019-07-29). The pound tumbled through the $1.23 level to a two-year low as the new Boris Johnson government stepped up plans to leave the EU in a so-called no-deal Brexit.

Traders also flocked to bonds, as the yield on the benchmark 10-year Gilt fell 4 basis points to 0.65%.

Read: British pound falls below key level, reaches new two-year low on no-deal Brexit concerns (http://www.marketwatch.com/story/british-pound-reaches-two-year-low-on-no-deal-brexit-concerns-2019-07-29)

The M&A news didn't inspire the action across the Atlantic as U.S. stocks traded in a tight range. The U.S. Federal Reserve is due to cut interest rates on Wednesday, with the markets unsure whether the rate cut will be a quarter-point or a half-point.

In its first major deal since ex-Goldman Sachs executive David Schwimmer took the reins as CEO, the London Stock Exchange Group (LSE.LN) said it's in talks to buy Refinitiv, owned by Blackstone (BX) and Thomson Reuters (TRI), in a $27 billion deal to bulk up its offerings of financial data and infrastructure. LSE shares jumped nearly 15%.

Also read: Five things you need to know about the LSE-Refinitiv merger (http://www.marketwatch.com/story/five-things-you-need-to-know-about-the-lse-refinitiv-merger-2019-07-29)

Analysts at UBS, who rate LSE at neutral, said the deal would lift LSE earnings by 8% in its first year and by 20% in year three, excluding any refinancing benefits.

Just Eat(JE.LN) jumped 23% to 780 pence after it and Takeaway.com (TKWY.AE) announced merger talks, in a deal where the Dutch-listed group would buy the U.K.-listed company in a stock swap valuing Just Eat, using Friday's closing prices, at 731 pence a share. Activist investor Cat Rock has stakes in both food delivery companies and has been reported to be pushing for a deal.

Heavyweight Vodafone Group (VOD.LN) (VOD.LN) extended last week's gains from announcing it may sell its European towers business, with shares rising another 4.3% on Monday.

Ferguson shares (FERG.LN) rose 2.3% as Sky News reported that Nelson Peltz's Trian (https://news.sky.com/story/activist-peltz-wants-plumber-ferguson-to-sell-uk-business-11772459) has urged the plumbing products distributor to sell its U.K. business.

(END) Dow Jones Newswires

July 29, 2019 12:01 ET (16:01 GMT)

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