By Steve Goldstein, MarketWatch
British stocks on Monday enjoyed their best single-day performance in six months as the pound collapsed on concerns the U.K. will leave the European Union without an agreed-upon deal.
The FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.22% rallied 1.82% to 7,686.61, the best gain of the major European stock markets. The pound tumbled through the $1.23 level to a two-year low as the new Boris Johnson government stepped up plans to leave the EU in a so-called no-deal Brexit.
Traders also flocked to bonds, as the yield on the benchmark 10-year Gilt /zigman2/quotes/211347177/realtime BX:TMBMKGB-10Y -2.29% fell 4 basis points to 0.65%.
The M&A news didn’t inspire the action across the Atlantic as U.S. stocks /zigman2/quotes/210598065/realtime DJIA -0.37% traded in a tight range. The U.S. Federal Reserve is due to cut interest rates on Wednesday, with the markets unsure whether the rate cut will be a quarter-point or a half-point.
In its first major deal since ex-Goldman Sachs executive David Schwimmer took the reins as CEO, the London Stock Exchange Group /zigman2/quotes/206625606/delayed UK:LSE +0.82% said it’s in talks to buy Refinitiv, owned by Blackstone /zigman2/quotes/203156858/composite BX -0.73% and Thomson Reuters /zigman2/quotes/203550191/composite TRI +0.58% , in a $27 billion deal to bulk up its offerings of financial data and infrastructure. LSE shares jumped nearly 15%.
Analysts at UBS, who rate LSE at neutral, said the deal would lift LSE earnings by 8% in its first year and by 20% in year three, excluding any refinancing benefits.
Just Eat /zigman2/quotes/205192708/delayed UK:JE +0.53% jumped 23% to 780 pence after it and Takeaway.com /zigman2/quotes/201653805/delayed NL:TKWY +5.65% announced merger talks, in a deal where the Dutch-listed group would buy the U.K.-listed company in a stock swap valuing Just Eat, using Friday’s closing prices, at 731 pence a share. Activist investor Cat Rock has stakes in both food delivery companies and has been reported to be pushing for a deal.
Heavyweight Vodafone Group /zigman2/quotes/202484985/delayed UK:VOD +0.74% /zigman2/quotes/202862751/composite VOD +0.74% extended last week’s gains from announcing it may sell its European towers business, with shares rising another 4.3% on Monday.