Market buzz: M&A news for FirstGroup and IAG; Trump at it again

1630: Sterling on a tear versus the euro, up 0.85% at 1.1560, and atop technical resistance around the 1.15 area. Things are looking up for the pound now.

1543: Commenting on IAG's stake purchase in Norwegian Air Shuttle, fund managers at Spain's GVC Gaesco say the Nordic carrier's shares continued to be undervalued even after Thursday's sharp gains and are staying put on their positions in the stock.

For his part, Alex Patterson at Investec has expressed surprise at IAG's 'timing' for the move, telling clients the potential sale of Alitalia to a consortium including Air France and KLM or to Lufthansa may have pushed the Anglo-Spanish carrier into a "land grab" for other assets.

"Norwegian completed two equity raises in March raising a total of NOK 1.5bn (£138m). IAG is now giving credibility to Norwegian, which the company lacked before, and this may allow Norwegian to make further equity issues at a much higher price."

1542: Trump’s tweet helped send the Dow Jones sharply higher, Germany's DAX and France's CAC are up 0.9% and 0.6% respectively, though the FTSE has dipped back down into the red as the pound rises.

Climbing 300 points, the Dow Jones re-hit 24500 after the bell, notes Connor Campbell at Spreadex, which has lifted the US index near levels not seen for three weeks, helped by a 2% jump from Boeing.

"The thrust of the Dow’s growth came from Donald Trump seemingly stepping back from the brink of military action in Syria he so brazenly strode towards last night. Of course, all of this has happened over Twitter, which admittedly has become the main source of domestic and foreign policy in the US."

Looking at the eurozone, Campbell says: "The region’s indices also benefited from the euro’s decline; the single currency fell 0.4% against the dollar and 0.6% against the pound, as the ECB meeting minutes showed that the central bank was keen to downplay the idea that last month’s slight change in wording meant it would be changing the direction of its policy."

1502: Walt Disney will have to make a mandatory takeover offer for Sky within 28 days of the completion of its acquisition of 21st Century Fox's assets, if the rival Fox and Comcast bids fail, the UK Takeover Panel ruled earlier.

Just now, Fox says it "remains committed" to its recommended cash offer for Sky, supported by revised remedies recently offered to the CMA.

1425: Shares in software group Micro Focus International spiked on Thursday afternoon on reports that activist investor Elliott Investors had taken a stake.

1309: BP says its forming an alliance with Brazil's Petrobras, "committed to exploring potential joint commercial agreements in areas of mutual interest in upstream, downstream, trading and across low carbon initiatives, inside and outside Brazil".

1229: US futures pointed to a positive open on Wall Street on Thursday following heavy losses in the previous session, after President Trump backtracked on the aggressive stance he took on Syria a day earlier. Dow Jones and S&P 500 futures were up 0.5%, while Nasdaq futures were 0.6% firmer.

1202: The London midday report finds stocks reversing their earlier losses, helped along by solid performances from Shire and Tesco, as US President Trump graced his Twitter feed yet again with a message suggesting he was backtracking on his earlier aggressive stance on Syria.

The FTSE 100 was up 0.1% to 7,262.14, having been a touch lower in earlier trade, while the pound was up 0.3% against the euro at 1.1497 and flat versus the dollar at 1.4178.

1140: Walt Disney will have to make a mandatory takeover offer for Sky within 28 days of the completion of its acquisition of 21st Century Fox's assets, if the rival Fox and Comcast bids fails, the UK Takeover Panel has ruled.

The panel said Disney must make an offer to Sky shareholders of £10.75 in cash for each of their shares if Fox's takeover of the 61% of Sky it doesn't already own is blocked by competition authorities.

Disney would not be forced to make an offer if Fox or Comcast - which announced in February that it was considering making an offer for the London-listed broadcaster - buys Sky, or if any other third party buys more than half of Sky's ordinary shares.

1135: Another day, another Trump tweet, and this time he's backing down. The market's pleased and the FTSE 100 is in positive territory.

Never said when an attack on Syria would take place. Could be very soon or not so soon at all! In any event, the United States, under my Administration, has done a great job of ridding the region of ISIS. Where is our “Thank you America?”

— Donald J. Trump (@realDonaldTrump) April 12, 2018

0908: Pets at Home is in the dog house with Morgan Stanley peering at the accounts of almost 400 of its jointly owned vet practices and saying it has become "rather sceptical about the main bull point in the Pets at Home investment case".

0858: The London open market report found stocks just in the red amid tension over Syria, but the FTSE 100 is now in positive territory, up just two points at 7,259.15.

"Fading fears of a full-blown trade war between the US and China has been a big positive for global stock markets, but equity investors are now taking money off the table ahead of possible US air strikes against Syria," says Lee Wild, head of equity strategy at Interactive Investor. "Already at odds with Russia over the poisoning of former spy Sergei Skripal, risk here is of serious escalation of hostilities in the Middle East if Donald Trump and the West provoke Syria’s allies Russia and Iran."

0840: Retailers Tesco, Next and M&S are top of the leaderboard this morning as investors and analysts take a more positive view after results from the supermarket giant yesterday. FirstGroup is up the most, down on the FTSE 250, climbing 9% after turning down a potential offer overnight.

0839: Online grocer Ocado has been downgraded to 'neutral' by JPMorgan Cazenove after the shares enjoyed a strong share price performance in recent months.

0814: Shore Capital analyst Graeme Kyle has upgraded SIG after shares in the building products supplier have fallen circa 25% since the start of the year. "We think the rapidly improving cash flow profile has been overshadowed by messy FY2017A statutory results, two internal accounting mishaps and spluttering UK commercial construction demand," he says.

Elsewhere Carpetright has issued a statement today that ShoreCap's Phil Carroll sees as "progressive in relation to the medium term prospects for the business". The statement CVA proposal, equity capital raise update, trading update and ratification of technical breach.

0749: Train and bus operator FirstGroup yesterday evening (1830 BST) confirmed that it has received and rejected a "preliminary and highly conditional indicative proposal" from New York based buyout firm Apollo Management relating to a possible cash offer.

0744: Among the morning's UK company news, Playtech has announced an Italian acquisition, Intertek has bought a Colombian business, and National Grid said major storms in the US will dampen its full-year profits but that earnings per share will be largely offset by better finance costs and tax.

Thursday's newspaper round-up includes a downbeat view on the housing market from RICS and a large investor in Hammerson telling the shopping centre owner to “walk away” from a proposed merger with Intu.

0709: US stocks were sent lower overnight by escalating geopolitical risks in Syria, with the risk-off environment helping drive a rally in long-end US Treasuries. The FTSE 100 is seen falling 17-18 points at Thursday's market open.

On that note, Theresa May plans to convene a 'war cabinet' on Thursday in order to seek pre-approval for the UK to join a tripartite attack on the Syrian regime in response to its alleged use of chemical weapons.

The military action, which might start within hours of Cabinet approval, would be led by France and the US and be aimed at Syrian president Bashar al Assad's chemical weapons infrastructure, Sky reported.

0659: TD Securities notes the Japanese yen, up 0.3%, was the top performing G10 currency against the greenback "as the pullback in market sentiment boosted demand for safe-haven assets", while USDCAD continued its descent on higher crude oil prices that were lifting UK oil stocks yesterday. Meanwhile, the rouble rallied by over 3% from intraday lows to end the session up 0.7%.

"Asian equities fell during Asian trading, following a weak close to US markets," TD says. Bonds were mixed, with Indian bonds in particular, continuing to sell off. Meanwhile oil held gains, with Brent crude above $72, while precious and base metals prices slipped.

"ECB minutes and Swedish inflation are the main risk events for Thursday. "Markets will also brace for the onset of US earnings season, with several companies scheduled to report tomorrow."

0655: Overnight, the US Federal Reserve were shown to be more confident on the economic outlook when they met last month, with minutes of the meeting showing several policymakers were of the belief that at some point in about two years' time rates would need to rise above their normal longer-run value.

Central to the above, Fed heads reached the conclusion that the White House's December tax reforms were set to deliver a bigger than previously expected boost to activity.

0654: The US closing market report shows the Dow Jones fell 0.9% to 24,189.45, the S&P 500 down 0.55% and the Nasdaq Composite down 0.36%.

Wall Street showed some caution ahead of the release of the Fed minutes and after a slightly worse-than-expected print on US inflation data for March, with geopolitical tensions around Syria weighing on sentiment.