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FTSE nearly flat as Syria strikes may or may not happen

Article By: ,  Senior Market Analyst
April 12, 2018 1:05 PM

The FTSE 100 has spent the day in directionless trade and closed marginally lower, down 0.02% at 7,255.06, as geopolitical concerns dominated the market.

Tensions building up around Syria subsided somewhat after President Donald Trump indicated that an airstrike on the country may no longer be imminent. 

US indexes took the news well – amid data showing that jobless claims have dropped to a near 45-year low. The Dow Jones Industrial Average traded 1.05% higher at 24,441.82 while the S&P 500 rose 0.75% and the Nasdaq 0.98% to 2,663.11 and 7,137.77, respectively.

But Trump’s open ended comment that the Syria strike “could be very soon or not so soon,” will keep the stock markets on their toes over the coming days

European markets also traded higher although the focus there was less on Syria and more on minutes from the latest European Central Bank policymaking meeting. The minutes indicated that the central bankers were concerned over the risk of a full-fledged trade war between the US and China and how this could potentially hurt the euro.

The pound strengthened slightly against the euro to trade up 0.79% and it also firmed against the dollar, up 0.38%

British Airways parent considers Nordic acquisition

Shares in British Airways owner International Consolidated Airlines Group didn’t take well to news that the company was considering acquiring Norwegian Air Shuttle despite the fact that the acquisition would increase IAG’s market share amid rising competition among budget airlines. 

IAG shares dropped 1.3% to 607.70 after the company said it had bought 4.6% in the Norwegian carrier and that it plans to start discussions including the possibility of a full offer. 

Norwegian has been expanding fast in the low-cost, long-haul market including on transatlantic routes but like many budget airlines which operate on a very thin margin has been grappling with rising fuel prices. Tensions around Syria will not help as they pushed oil prices to a three-year high of $72 a barrel Thursday.

UK regulator forces Walt Disney’s hand over Fox acquisition

UK regulator the Takeover Panel put Walt Disney on the spot saying that it will have to make an offer for the whole of Sky if it succeeds in buying Twenty-First Century Fox . 

This includes the 39 % stake that Fox holds in Sky. 

The regulator also ruled that Disney has to match Fox's £10.75 a share offer for the shares in Sky which it does not already own. 

Rupert Murdoch's Fox agreed to buy all of Sky 17 months ago while Disney agreed to buy Fox assets, including its stake in Sky, in separate deals. Both deals still need regulatory clearance.

Software firm Micro Focus rallies as activist investor builds up stake

Shares in software firm Micro Focus rallied 12.6% % to 1,283.50 as news broke that that activist investor Elliott Management Corp. has built up a position in the enterprise software firm. 

The stock move is a reversal of a sharp drop seen last month after the company’s chief executive Chris Hsu stepped down and the company warned of a revenue decline this year following complications after a reverse takeover of Hewlett Packard Enterprise’s software arm.  

The focus on Friday will be on earnings from major US banks JP Morgan and Citigroup, both expected to show strong increases in profits.

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