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Interserve hit by FCA investigation

market relief

market relief

European equity markets are mixed this morning, as a lack of macroeconomic news has left traders uninspired. 

Stocks in Europe have had a good run recently, and this could just be a case of the bulls taking a breather.

ZPG, the owner of Zoopla, has accepted a takeover offer from Silver Lake. The US private equity firm made a 490p per share offer, which is a 31% premium above yesterday’s closing price. When you take into account that ZPG’s all-time high share price was 401p – in March 2017, it is clear that Silver Lake is making a generous offer. Three-quarters of ZPG’s shareholders need to approve the offer for it to be accepted. Shares in ZPG are up 30% at 487p.

Interserve has said it is being investigated by the FCA over the handling of insider information. The regulator is looking into the way Interserve informed the market it was exiting the energy-from-waste business in 2016. At the end of last year the company issued a profit warning and there were fears it would break its covenants, and since then the stock has struggled. Today’s announcement about the FCA investigation has eroded investor confidence again.

Shares in Randgold Resources have bounced back after yesterday’s sell-off. The stock took a hit on Thursday after it reported a 24% drop in first-quarter profit, largely on account of industrial action. The mining company stated it is on track to achieve its full-year target and now that the dust has settled, investors are bargain hunting.

EUR/USD is a touch lower this morning after Spanish inflation cooled. The cost of living in Spain on a yearly basis dipped to 1.1% from 1.2%. The region has been struggling with weak demand, and this report highlights the subdued cost of living.

At 3pm (UK time) the latest University of Michigan consumer sentiment survey results are released, and the consensus estimate is for a reading of 98.5, up from 97.8 in April.  

We are expecting the Dow Jones to open up 16 points at 24,755 and we are calling the S&P 500 flat at 2,723. 

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.


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