Currys Shares Surge on JD.com Takeover Talk

Equities

The FTSE 100 index edged up by 0.2% on Monday to reach a near seven-week high, reflecting a modest yet positive start to the week for UK equities. This uptick in the market was partly fuelled by the pharmaceutical sector following significant regulatory approval in the United States.

AstraZeneca, a leading name in the pharma industry, saw its shares jump 3.2% after the US Food and Drug Administration approved a combination of its lung cancer drug Tagrisso with chemotherapy. This approval not only bolstered AstraZeneca's stock but also lifted the overall pharma and biotech sector.

Currys reported an exceptional day, with its shares soaring 36.4%. This surge came after news that JD.com, a major Chinese e-commerce entity, is considering a takeover of the British electronics retailer. This development indicates a potential bidding war, especially after Currys turned down a previous offer of 700 million pounds by activist hedge fund Elliott Management. The prospect of such a takeover underscores Currys as a significant player with a physical store presence in the UK electronics market.

Goldman Sachs upgraded its year-end target for the S&P 500 to 5,200, citing an optimistic profit outlook for the companies within the index. This adjustment reflects a roughly 4% increase from current levels and is buoyed by an anticipated 8% profit rise over the next 12 months for S&P 500 companies, driven by stronger economic conditions and improved margins among mega-cap firms. Particularly, the performance of the so-called Magnificent 7 stocks is expected to play a pivotal role in boosting the aggregate profits of the S&P 500, with significant contributions from advancements in artificial intelligence and robust consumer spending.

Forex & Commodities

On Tuesday, the US dollar saw a significant uptick, particularly strengthening past the 150 yen mark, driven by expectations that US interest rates might remain elevated for an extended period. This development contrasts with Japan's economic situation, where the country faces a recession and scepticism over a swift shift from its ultra-loose monetary policy. Meanwhile, China's yuan struggled to gain momentum despite a substantial cut to its mortgage benchmark rate, aiming to rejuvenate the property market and credit demand. The yuan's dip to a near three-month low was somewhat curbed by dollar selling from China's state-owned banks, yet investors remain cautious, calling for further policy support to bolster confidence.

The Australian and New Zealand dollars also experienced declines, attributed partially to the developments in China which failed to significantly lift investor sentiment. The broader financial market saw the US dollar's strength affecting other major currencies, with the euro and sterling witnessing minor pullbacks against the dollar.

On the commodities front, oil prices remained near three-week highs amid escalating Middle East tensions and a recovery in demand from China, despite some underlying concerns about global demand.