London close: Stocks tread water on quiet Monday

Investors in London saw a positive finish to their Monday, as a flurry of corporate deal activity boosted market sentiment.

Despite a lack of significant economic news, the focus remained firmly on equities following a round of major bank earnings in the US on Friday, which surpassed market expectations.

The FTSE 100 ended the day up 0.1%, closing at 7,879.51, while the FTSE 250 was ahead 0.23% to end the session at 19,286.90.

Sterling, however, was mixed against other major currencies, last falling 0.45% against the dollar to trade at $1.2357, while it strengthened 0.26% on the euro to change hands at €1.1323.

“Stocks have been left bereft this afternoon with little on the calendar today, and ahead of earnings tomorrow,” said IG chief market analyst Chris Beauchamp.

“‘Muted’ is perhaps the best way to describe the session, though it will no doubt heat up tomorrow once earnings start to come through thick and fast.

“Overall, stocks continue to defy expectations of a fresh downturn, and while it is very early days, earnings season has not yet provided much of a bearish catalyst.”

Empire State index comes in seriously ahead of forecasts

Amid a dearth of economic news was a report from the Federal Reserve Bank of New York that the factory sector activity in the region saw a significant improvement in April.

The Empire State index showed a sharp increase from a reading of -24.6 in March to 10.8 in April, which was also much better than the -18.0 point reading forecast by economists.

Its key indicator tracking new orders saw a substantial surge, rising from a reading of -21.7 to 25.1.

Meanwhile, the sub-index for employment remained relatively stable, moving up slightly from -10.1 in the previous month to -8.0.

The sub-index for prices received by firms also edged up slightly from 22.9 to 23.7.

Deal news provides a boost for stocks

On London’s equity markets, Network International Holdings was among the biggest gainers as its share price soared 19.87%.

The payments firm said it had received a non-binding proposal from a consortium of CVC and Francisco Partners about a potential cash offer of 387p per share.

Oil and gas engineering firm John Wood Group was ahead 6.7% after it said it had decided to engage with US private equity group Apollo to explore a potential £1.66bn takeover offer.

The news followed four previous proposals from Apollo, which were all rejected.

Wood had now, however, granted access to documents for due diligence after a fifth approach at 240p per share.

International Distributions Services rose by 6.56% after it emerged over the weekend that its Royal Mail subsidiary and the Communication Workers Union had reached an agreement on pay and employment terms.

QinetiQ Group also rallied, lifting its full-year guidance following an impressive fourth-quarter performance.

RS Group was lifted by an upgrade to "outperform" from "sector perform" at RBC Capital Markets, which said the risk-reward was now more favourable.

On the downside, Barclays fell 2.28% following reports that the bank was planning to cut about 100 roles in its investment banking group.

Meanwhile, HSBC Holdings and NatWest Group were both down, with banks more generally experiencing weakness, following gains at the end of last week after solid results from Citigroup and JPMorgan.

Outsourcer Capita slid 9.5% following a report that a recent cyberattack on the company by Russian hackers was "far more serious" than it had previously admitted.

Sirius Real Estate saw a more modest fall of 1.17%, despite achieving an overall rent roll increase of 8.1% in the financial year just ended.

Outside the FTSE 350, fashion retailer Quiz saw shares tumble by 22.33% after striking a cautious note on the outlook, warning that inflationary pressures were denting consumer demand.

However, e-commerce company THG surged by 44.87% after confirming it had received a highly preliminary and non-binding indicative takeover proposal from PE firm Apollo.

Reporting by Josh White for Sharecast.com.