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U.K. stocks headed higher on Tuesday, as traders welcomed a $62 billion takeover deal for Shire and absorbed better-than-expected trade data from China.
What are markets doing?
The FTSE 100 index climbed 0.3% to 7,586.26, on track for its highest close since late January. The London benchmark on Friday jumped 0.9% to end with a sixth straight week of gains.
The pound fell to $1.3536 from $1.3555 late Monday in New York.
What is driving the market?
After being closed Monday for a U.K. holiday, British stocks were playing catch up with a rally across Europe on Monday, in which the Stoxx Europe 600 ended at more-than-three-year high.
Shares of Shire PLC helped lift the FTSE 100 on Tuesday, rising 3.9% after Takeda Pharmaceutical Co. said it would buy the drugmaker in a $62 billion deal. The announcement caps a months-long battle for the Dublin-based company and marks the largest-ever overseas acquisition by a Japanese company.
Miners traded mixed after data showed China’s exports rebounded more strongly than expected in April, rising 13%. Strong economic data from China tend to boost metal companies as the country is one of the world’s biggest users of natural resources.
What are strategists saying?
“The [China] trade figures are usually of importance because they give an indication of how mineralhungry China is, and in turn can have a major impact on the price of mining companies,” said David Madden, market analyst at CMC Markets UK, in a note.
“The announcement will also be importance as it highlights the trading imbalance between the U.S. and China. ... Global equity markets have been fairly stable recently and the lack of negative news in relation to the possible global trade war is a major factor, so dealers will be paying close attention to developments between the U.S. and China,” he added.
Stock movers
Among miners on the rise, shares of Fresnillo PLC gained 1.5%, while Antofagasta PLC climbed 0.4%. Heavyweights Rio Tinto PLC and BHP Billiton PLC , however, each moved 0.7% lower.
Unilever PLC put on 2.4% as the consumer products giant kicked off its €6 billion share buyback program announced in April.
Outside the FTSE 100 index, shares of Virgin Money Holdings PLC jumped 8% after news the parent of British lenders Clydesdale and Yorkshire Bank has pitched a tie-up with Virgin in a bid to create the U.K.’s leading challenger bank. Shares of CYBG were 1.1% higher.