London, US markets rise but Europe mostly down

19/07/2016 06:07 AST

European stocks mostly slid yesterday after a failed coup in Turkey but a mega takeover of a British iPhone chip designer propped up London equities, while Wall Street also firmed slightly. Markets appeared to have been left largely reassured by the failure of the military coup in Turkey and the reimposition of order under President Recep Tayyip Erdogan.

But “this happening so soon after the tragic events in Nice last week simply adds to plentiful pre-existing geopolitical tension”, noted analysts at Accendo Markets in a research note. In Europe, London’s benchmark FTSE 100 index stood out from the crowd, closing 0.4% higher at 6,695.42 points.

Analysts pointed to a post-Brexit investment boost from Japan’s mobile giant SoftBank agreeing a cash takeover of iPhone chip designer ARM Holdings for around £24.3bn ($32bn, €29bn).

SoftBank said it would offer £17 for each ARM share, a premium of around 43% compared with Friday’s closing price of £11.89.

That sent ARM’s share price rocketing by about 41% yesterday. “With gains in excess of 40%, ARM Holdings propped up the FTSE 100 after the takeover was agreed with Japan’s Softbank,” Jasper Lawler, of CMC Markets, said in a note to investors. But in the eurozone, Frankfurt’s DAX 30 slid 0.04% at 10,063.13 points and the Paris CAC 40 was down 0.3% at 4,357.74 points. The EURO STOXX 50 was down 0.05% at 2,957.09 points. Wall Street stocks headed higher as Bank of America kicked off a heavy week of quarterly earnings with better-than-expected results, despite a second-quarter earnings dip.

Asian stock markets mostly rose again following another record close on Friday on Wall Street but gains were tempered by profit-taking following last week’s global rally.

Expectations that central banks around the world will introduce fresh stimulus for their economies lit a fire under equities and high-risk assets last week, while confidence was further boosted by another round of upbeat US data.

Official figures Friday showed US retail sales beating forecasts, reinforcing the view that the world’s number one economy is getting back on track.

That followed a blockbuster reading on June jobs creation. The upbeat readings have raised the possibility of a Federal Reserve interest rate rise before the end of the year — something considered highly unlikely in the immediate aftermath of Britain’s decision to exit the European Union, which initially sent world markets tumbling. The broadly positive outlook sent the dollar rising.

The pound, which has been under pressure since the shock June 23 Brexit vote, also made inroads after hitting a 31-year low earlier in the month.

Gulf Times