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The FTSE 100 got off to a strong start on Monday, with investors upbeat after decent gains in Asia after China signalled support for the economy and further UK merger and acquisition activity.
At midday, the FTSE 100 index of leading shares was up 0.8% at 7,088. China's SE Composite index gained 2%, reversing some of last week's heavy losses, while Japan's Nikkei 225 added 1.8%.
Oil and gold prices were lower with Brent Crude down 1.4% to $74.39 per barrel and the precious metal falling 0.3% to $1,810 per ounce.
TAKEOVERS SPEED UP
Defence, aerospace and energy engineer Meggitt agreed to be acquired by US aerospace group Parker-Hannifin for £6.3 billion or 800p per share in cash, representing a 71% premium to last Friday's closing price.
Parker-Hannifin has committed to maintain existing technology and manufacturing that resides in the UK.
Separately, Meggitt said first-half underlying pre-tax profit fell 42% to £48.4 million, as revenue fell 16% to £680 million, hurt by weakness in the civil aerospace market. The shares surged 56% to 732p.
UK asset management services company Sanne Group gained 8% to 910p after the company said it was in advanced talks on a possible cash offer from private equity group Apex Group at price of 920p per share.
SSE ASSET SALE
Power utility SSE agreed to sell its 33.3% stake in UK gas distribution operator Scotia Gas Networks for £1.23 billion.
The stake is being sold to a consortium comprising existing Scotia Gas Networks shareholder Ontario Teachers' Pension Plan Board and Brookfield Super-Core Infrastructure Partners.
The deal will conclude SSE's £2 billion-plus disposals programme announced in June 2020, with total proceeds amounting to over £2.7 billion. The shares added 1.8% to £14.70.
HSBC RESULTS
Banking group HSBC said first half revenues dropped 4% to $25.6 billion reflecting lower net interest margins. However, all regions were said to be profitable with continued strength in Asia while HSBC UK reported pre-tax profit of $2.1 billion.
Overall, the bank said pre-tax profit increased by 151% to $10.8 billion as the bank released prior credit loss provisions. The bank reported a return on tangible equity of 9.4%, up from 3.8% last year.
The company expects to move within its target dividend payout ratio range of between 40% to 55% of earnings per ordinary share in 2021. The shares gained 0.2% to 398.25p.
OTHER NEWS
Pharmaceutical giant AstraZeneca said its drug to treat adult patients with moderate to severe systemic lupus erythematosus was approved in the US.
The approval by the Food and Drug Administration was based on efficacy and safety data from the Saphnelo clinical development programme, including two Tulip phase three trials and the Muse phase two trial.
Power control solutions group XP Power said first half pre-tax profit increased 59% to £16.4 million after revenues climbed 14% to £119.9 million.
The company said order growth was driven by continued strength in the semiconductor manufacturing equipment sector and a recovery in industrial technology.
Full year trading is now expected to be modestly ahead of consensus expectations. Current pre-tax profit forecasts for the year to December 2021 sit at £44.6 million.
XP Power declared an interim dividend of 37p, up from 18p year-on-year. The shares added 0.4% to £51.60.
Photo booth and laundry services group Photo-Me International jumped 2.7% to 77p after it said a stronger-than-anticipated recovery of photo booth activity prompted it to increase full year pre-tax profit expectations to October by around 22% at the midpoint to between £25 million and £30 million.