London midday: Stocks flat ahead of Trump's Iran call; Shire surges on Takeda deal
London stocks had given up earlier gains to trade flat by midday on Tuesday as caution set in ahead of US President Trump's announcement on the Iran nuclear deal later in the day, with a flurry of deal news to keep investors busy until then.
The FTSE 100 was flat at 7,568.83, while the pound was 0.1% firmer against the euro at 1.1382 but down 0.4% versus the dollar to 1.3505 as the greenback strengthened.
Earlier, data from lender Halifax showed UK house price growth unexpectedly eased in April. House prices in the three month to April were up 2.2%, down from the 2.7% growth seen in March and below expectations for a 3.3% increase.
On a monthly basis, prices were down 3.1% following a 1.6% rise in March, missing expectations for a much smaller drop of 0.2%. On a quarterly basis, meanwhile, prices were 0.1% lower than in the preceding three months, marking the third consecutive declined for this measure.
Halifax managing director Russell Galley said: "Housing demand has softened in the early months of 2018, with both mortgage approvals and completed home sales edging down. Housing supply - as measured by the stock of homes for sale and new instructions - is also still very low. However, the UK labour market is performing strongly with unemployment continuing to fall and wage growth finally picking up. These factors should help to ease pressure on household finances and as a result we expect annual price growth will remain in our forecast range 0-3% this year."
Investors were eyeing an announcement by US President Trump, due at 1900 BST, after he tweeted on Monday that he would be revealing his decision on the Iran deal ahead of the 12 May deadline for the nuclear pact.
FXTM research analyst Lukman Otunuga said: "Although President Trump is widely expected to withdraw the United States from the 2015 nuclear deal, lessons from the past have repeatedly taught investors that the US administration can be highly unpredictable.
"An unexpected scenario, in which Trump announces that the US will remain in the nuclear deal, should be warmly welcomed by investors. Alternatively, risk aversion may intensify if he moves forward with the 'nuclear option', which reimposes all sanctions on Iran and pulls the US out of the deal. Whatever the outcome of Trump’s decision, we are not ruling out ramifications on the financial markets. Global stocks, oil and safe-haven assets are just a few of the instruments that could be impacted."
On the UK corporate front, London investors returned from the long weekend to a raft of deal news.
Shire was the standout gainer as its board agreed a takeover offer from Japan's Takeda Pharmaceutical in a mix of cash and shares that values the FTSE 100 biotech at roughly £46bn. Three Shire directors will join Takeda's board as part of the deal.
Virgin Money also racked up strong gains after Clydesdale and Yorkshire Bank owner CYBG made an all-share takeover approach that values its FTSE 250 rival at £1.6bn. CYBG picked up slightly and fellow challenger banks Metro Bank and OneSavings both rallied.
Buy-to-let property lender Paragon Banking Group pushed higher after it confirmed that it is considering a possible acquisition of residential development finance lender Titlestone, while US cable network Comcast made various assurances around its bid for satellite broadcaster Sky, following reports that it is looking to raise funds to gatecrash Disney's purchase of assets from 21st Century Fox.
Following an earlier proposed deal, the Competition & Markets Authority said it has referred the proposed merger of SSE's retail business and Npower for an in-depth investigation after finding competition concerns.
AstraZeneca advanced after saying it had sold the rights to its antipsychotic treatment Seroquel to Luye Pharma for $538m and getting European regulatory approval for its Lynparza cancer treatment.
Bookmaker William Hill rose after it said net revenue for the first 17 weeks of the year was up 3% thanks to strong online and US performances.
On the downside, FirstGroup tumbled after private equity group Apollo Management said it would not be making an offer for the transport operator.
Insurer Hiscox ticked a touch lower as it said gross written premiums grew by 20.3% in the first three months of the year but warned that growth in big-ticket business for the rest of the year will be more measured.
In broker note action, Just Group was initiated at 'hold' by Deutsche Bank.
Market Movers
FTSE 100 (UKX) 7,568.83 0.02%
FTSE 250 (MCX) 20,549.72 0.63%
techMARK (TASX) 3,458.90 0.57%
FTSE 100 - Risers
Shire Plc (SHP) 4,006.50p 3.90%
Unilever (ULVR) 4,078.78p 2.46%
Kingfisher (KGF) 287.50p 2.24%
Croda International (CRDA) 4,567.00p 2.22%
Ashtead Group (AHT) 2,132.53p 2.18%
Mondi (MNDI) 1,976.50p 2.12%
Old Mutual (OML) 256.30p 2.03%
British Land Company (BLND) 685.40p 1.99%
Scottish Mortgage Inv Trust (SMT) 496.18p 1.89%
InterContinental Hotels Group (IHG) 4,738.00p 1.52%
FTSE 100 - Fallers
Standard Chartered (STAN) 736.20p -1.58%
Sky (SKY) 1,353.00p -1.42%
Sainsbury (J) (SBRY) 297.60p -1.23%
BP (BP.) 553.00p -0.91%
WPP (WPP) 1,270.00p -0.86%
Tesco (TSCO) 238.80p -0.79%
HSBC Holdings (HSBA) 709.10p -0.74%
Royal Dutch Shell 'A' (RDSA) 2,559.00p -0.74%
Diageo (DGE) 2,647.50p -0.58%
Royal Mail (RMG) 595.40p -0.57%
FTSE 250 - Risers
Virgin Money Holdings (UK) (VM.) 339.40p 8.64%
RHI Magnesita N.V. (DI) (RHIM) 4,864.00p 6.90%
Grafton Group Units (GFTU) 789.50p 5.27%
OneSavings Bank (OSB) 409.80p 3.64%
Indivior (INDV) 474.90p 3.53%
Inmarsat (ISAT) 390.50p 3.28%
Hikma Pharmaceuticals (HIK) 1,337.50p 3.04%
Weir Group (WEIR) 2,238.00p 3.04%
Hochschild Mining (HOC) 225.80p 2.87%
Vesuvius (VSVS) 612.00p 2.86%
FTSE 250 - Fallers
FirstGroup (FGP) 103.31p -6.93%
Capita (CPI) 194.65p -2.67%
Just Group (JUST) 140.10p -2.64%
Caledonia Investments (CLDN) 2,707.60p -2.08%
TI Fluid Systems (TIFS) 256.00p -1.54%
Greencoat UK Wind (UKW) 120.00p -1.48%
Alfa Financial Software Holdings (ALFA) 344.50p -1.29%
Fidelity European Values (FEV) 216.52p -1.13%
Daejan Holdings (DJAN) 6,130.00p -1.13%
Millennium & Copthorne Hotels (MLC) 541.00p -1.10%