Economic news

FTSE 100 Extends Gains, Micro Focus Soars on Buyout Deal

  • Micro Focus nearly doubles in value
  • British energy bills to rise 80% from October - regulator
  • FTSE 100 up 0.5%, FTSE 250 adds 0.6%
  • Both the indexes set for weekly losses

Aug 26 (Reuters) - UK's blue-chip index rose for a second straight day on Friday on gains in commodities and banking sectors, while shares of software firm Micro Focus nearly doubled after a $6 billion buyout deal.

The FTSE 100 index rose 0.5%. The industrial metal and mining index climbed 1.7% as hopes of fresh stimulus in China aided copper and other metal prices.

Still, the main index was heading for weekly losses after data highlighted the impact of surging prices on business activity and central bank policymakers stuck to an aggressive tone on interest rate hikes despite signs of economic slowdown.

British energy bills will rise 80% to an average of 3,549 pounds ($4,188) a year from October, said regulator Ofgem, calling it a "crisis" that needed to be tackled by urgent and decisive government action. 

"It's what people have been anticipating already," said Oliver Allen, markets economist at Capital Economics.

"When we find out who won the Conservative Party leadership election, people might get a bit more of a clue on what the government in the UK is going to give households in terms of assistance with gas prices."

The two candidates, Liz Truss and Rishi Sunak, have clashed over how to respond. Their proposals, which include suspending environmental levies or cutting a sales tax, have been dismissed by economists as too little to avert the unprecedented hit to household budgets.

Investors will be watching Federal Reserve Chair Jerome Powell's speech later in the day for clues on where U.S. interest rates are headed.

Drugmaker GSK gained 2% after Citigroup said it was on "a positive catalyst watch" following the Zantac legal developments that could materially reduce its exposure, compared to the $17 billion that is discounted. GSK's recently spun-off consumer health unit Haleon added 2.6%.

The domestically-focussed FTSE 250 index rose 0.6% but was also on course to record a sharp weekly decline.

Micro Focus International Plc soared 91.9% to hit more than one-year highs after Canada's OpenText said it would be acquiring the enterprise software maker in an all-cash deal of $6 billion including debt.

Reporting by Johann M Cherian and Sruthi Shankar in Bengaluru; Editing by Rashmi Aich and Sriraj Kalluvila

Source: Reuters

To leave a comment you must or Join us

More news

Back to economic news list

By visiting our website and services, you agree to the conditions of use of cookies. Learn more
I agree