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Vodafone jumps on Liberty deal

The FTSE 100 is being helped by oil stocks in the wake of President Trump’s withdrawal from the Iran nuclear deal.

BP and Royal Dutch Shell are among the biggest gainers this morning, as they benefit from the underlying oil market. The US has pledged to reintroduce sanctions on Iran, and in turn the possibility of reduced supply is pushing up the oil price.

Vodafone is set to acquire assets from Liberty Global worth £16.1 billion. If the deal gets approval from the regulators, it will give Vodafone assets in Germany, Romania, Hungry, and the Czech Republic. The motivation behind the move is to challenge Deutsche Telekom’s dominance in Germany. It would allow Vodafone to offer more competitive packages to customers, and it is estimated that the transaction would lead to savings of €1.5 billion through synergies. Vodafone shares are up 1.3% on the back of the announcement.

Burberry shares are in the red after the Belgian billionaire Albert Frere declared that he is going to sell his 6.6% stake in the company. In January, the fashion house stated that third-quarter like-for-like sales increased by 2%, and the company reiterated its full-year guidance. Yesterday, the stock hit its highest level since November, and it has rallied more than 25% since the lows of February. Mr Frere didn’t give a reason for disposing his Burberry shares, but the share price has performed well recently so it might be a matter of getting out during a positive run.

EUR/USD continues to come under pressure, and the dip in French industrial production this morning has made matters worse. In March, French industrial production contracted by 0.4% on a month-on-month basis, a far worse figure than economists’ expectations of +0.4%.

At 1.30pm (UK time) the latest US PPI data is released, with economists expecting a reading of 2.8%, which would be a decline from the previous reading of 3%.

We are expecting the Dow Jones to open up 82 points at 24,442, and we are calling the S&P 500 up 10 points at 2,681.


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