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Financial, travel stocks weigh on FTSE 100; Morrisons drops

10/04/2021 | 04:54am EST

(For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window)

* Morrisons shares drop on $9.5 billion takeover

* Trading platform Plus500 gains on strong forecast

* AstraZeneca up on breakthrough designation for drug

* FTSE 100 down 0.2%, FTSE 250 off 1.3%

Oct 4(Reuters) - London's FTSE 100 index fell on Monday as weakness in financial and travel-linked stocks offset a bounce in energy, while Morrisons dropped after private equity firm Clayton, Dubilier & Rice (CD&R) won a bid for the company.

The blue-chip FTSE 100 index ended 0.2% lower, extending losses for the third straight session, weighed by weakness in financials including HSBC, Prudential and Lloyds Group.

Morrisons declined 3.8%, its worst single-day fall since September last year, after U.S. private equity firm CD&R won the auction for Britain's fourth-largest supermarket with a 7 billion pound ($9.5 billion) bid, only marginally above its 285 pence a share offer, already recommended in August.

Peer Sainsbury's rose 3.3% on hopes that SoftBank's Fortress Investment could turn its attention to the company after losing the bidding war for Morrisons.

The domestically focussed mid-cap index fell 1.3%, closing at over a two-month low, led by declines in consumer discretionary stocks.

The FTSE 100 is up nearly 8.5% so far this year on accommodative central bank policies and re-opening optimism.

The index is, however, 2.3% below the highest point hit this year as inflation risks and signs of slowing local and global economic growth have weighed on investor sentiment.

"Inflation continues to underpin market sentiment, with fears over a protracted period of above-target prices bringing expectations of a dramatic rerate in monetary policy expectations," Joshua Mahony, senior analyst at IG Group, said.

"Investors are growing increasingly fearful that the November and December period is characterised by a lack of supply and higher prices."

Limiting further losses were heavyweights BP and Royal Dutch Shell, up 2.1% and 2.2% respectively, tracking a jump in crude prices.

Among other stocks, AstraZeneca rose 0.8% after its breast cancer drug, Enhertu, received a breakthrough therapy designation.

Online trading platform Plus500 rose 1.8% after raising its forecast for the second time in less than three months.

(Reporting by Bansari Mayur Kamdar, Shashank Nayar and Amal S; Editing by Sriraj Kalluvila and Andrew Heavens)

ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
ASTRAZENECA PLC -0.19% 8209 Delayed Quote.12.38%
BP PLC 2.60% 345.65 Delayed Quote.32.10%
FTSE 100 0.43% 7159.29 Delayed Quote.10.35%
HSBC HOLDINGS PLC 0.06% 431.75 Delayed Quote.13.92%
J SAINSBURY PLC -0.72% 276.6 Delayed Quote.23.64%
LLOYDS BANKING GROUP PLC -0.71% 46.595 Delayed Quote.28.77%
PLUS500 LTD. 0.72% 1264.5 Delayed Quote.-13.41%
PRUDENTIAL PLC 1.93% 1295 Delayed Quote.-5.68%
SOFTBANK GROUP CORP. -5.10% 5599 End-of-day quote.-30.52%
WM MORRISON SUPERMARKETS 0.00% 286.4 End-of-day quote.61.49%
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