The FTSE 100 has surged in London this Wednesday, with sentiment staying positive ahead of tomorrow’s decision by the European Central Bank (ECB). A surge in London Stock Exchange (LON:LSE) is also lending support to the blue-chip index, as Hong Kong Exchange shocked the market with a tie-up proposal.
FTSE 100 rallies on Wednesday
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As of 12:23 BST, the UK benchmark index had added 67.57 points to stand 0.93 percent higher at 7,335.52. Sentiment has been upbeat ahead of tomorrow’s ECB monetary policy decision, with the bank largely expected to trim rates.
“I wonder whether investors have positioned themselves to be disappointed,” Oanda analyst Craig Erlam commented, as quoted by Reuters, in relation to some aspects of an expected stimulus plan from the ECB.
LSE rallies after merger proposal
London Stock Exchange has been among today’s most notable FTSE 100 movers as Hong Kong Exchanges and Clearing announced a cash-and-share tie-up proposal valuing the blue-chip group at about 8,361 pence per share, or £29.6 billion for LSE’s entire issued and to be issued ordinary share capital, implying an enterprise value of £31.6 billion.
“The proposed offer would be totemic in terms of East-West relations and the complementary strengths of the two exchanges would make strategic sense,” Richard Hunter, head of markets at Interactive Investor, commented, as quoted by Proactive Investors, adding that the proposal was “a fascinating prospect, but far from a done deal”.
“The fact that the LSE share price has already retreated from the initial 10% spike on release of the news may reflect some initial scepticism around the likelihood of the deal going through,” the analyst pointed out. LSE’s shares are changing hands 5.35 percent higher at 7,168.00 points.
The FTSE 100 was 0.97 percent up at 7,338.70 points as of 12:50 BST on Wednesday, 11 September 2019.