FTSE 100 movers: Shire and BAE take off, Paddy Power slips

London's FTSE 100 was leaving its mid-cap sibling in the dust on Tuesday, led by gains for Shire, BAE Systems and oil giants BP and Shell.

Shire was an early riser on the back of reports that it was close to thrashing out a deal with Japan's Takeda Pharmaceutical. The Dublin-based biotech put out a statement in early afternoon that it was considering a new takeover proposal that it had received on Tuesday, which Takeda confirmed, though neither said at what price.

At the end of last week, Shire received a proposal from Takeda of £47 per share, comprised of £21 cash paid in dollars and £26 of new Takeda shares. There was speculation in the City that the new offer could see the cash proportion increase further.

Shares in BAE Systems were given a boost as Berenberg upgraded them to a 'buy' recommendation from 'hold' and upped its target price to 700p from 600p. Analyst Andrew Gollan, who has taken over coverage, said the shares are not fully reflecting the defence contractor's "much improved" growth outlook and supportive defence market, where he pointed to BAE's 40% revenue exposure to US defence spending, which is rising after the removal of federal spending caps in January and the March enactment of the FY 2018 budget that included a 10% increase in spending.

BP and Shell were higher as oil prices remained elevated.

On that note, analyst Michael Hewson at CMC Markets said: "Crude oil prices continue to be a cause for concern hitting a fresh three year high above $75, despite comments from Iranian oil minister Bijan Zanganeh that there would be no need to extend the current pact of output freezes beyond this year.

"It is this move higher in crude oil prices, along with the rise in demand, that is helping fuel the recent rise in yields as well as the positive tone for equity markets, however if it continues too far we could start to see it act as a drag on equity markets, if prices along with yields start to move even higher."

London Stock Exchange share rose as it reported first-quarter trading broadly in line with expectations before an annual shareholder meeting that will seek to draw a line under the group’s recent troubles. Total income for the three months to the end of March increased 13% to £520m and gross profit rose 13% to £464m. Analysts on average had forecast total income of £522m and £467m gross profit.

Looking at the downside, Paddy Power Betfair was a big faller a after reports that the government is ready to back a big reduction in the maximum stake for highly profitable and addictive gambling machines.

Chancellor Philip Hammond is understood to have accepted expert recommendations that stakes for fixed-odd betting terminals should be reduced from £50 to £2, The Times reported.

Paddy Power had guided towards a potential impact in a £2 case of a 33-43% hit to machine revenue.

Wealth manager St James's Place fell as it posted a drop in first-quarter assets under management, although gross inflows grew. In the three months to the end of March 2018, group funds under management fell to £89.91bn from £79.84bn due to weaker investment markets.

Market Movers

FTSE 100 (UKX) 7,425.16 0.36%
FTSE 250 (MCX) 20,265.29 -0.25%
techMARK (TASX) 3,443.51 -0.05%

FTSE 100 - Risers

Shire Plc (SHP) 3,972.00p 4.53%
BAE Systems (BA.) 621.20p 2.64%
Royal Mail (RMG) 578.60p 2.30%
BP (BP.) 531.20p 1.84%
Unilever (ULVR) 3,927.89p 1.60%
BHP Billiton (BLT) 1,557.20p 1.34%
London Stock Exchange Group (LSE) 4,269.00p 1.28%
United Utilities Group (UU.) 712.80p 1.28%
Severn Trent (SVT) 1,879.80p 1.06%
WPP (WPP) 1,129.50p 1.03%

FTSE 100 - Fallers

Paddy Power Betfair (PPB) 6,970.00p -4.78%
Mediclinic International (MDC) 673.20p -1.92%
Barratt Developments (BDEV) 554.90p -1.40%
St James's Place (STJ) 1,130.50p -1.40%
Halma (HLMA) 1,221.90p -1.38%
Anglo American (AAL) 1,752.40p -1.31%
GKN (GKN) 454.33p -1.21%
Persimmon (PSN) 2,689.00p -1.18%
Standard Life Aberdeen (SLA) 365.40p -1.14%
CRH (CRH) 2,500.00p -1.11%