LONDON (Reuters) - Britain’s top share index declined with other European bourses at the start of the second quarter, but a few stocks such as Sky SKYB.L managed to rise through the session.
Shares in Sky closed up 2.1 percent after Twenty-First Century Fox (FOXA.O) said it could legally separate Sky News within the group to allay British regulatory concerns about the channel’s independence under Rupert Murdoch’s ownership.
Fox agreed in December 2016 to buy the 61 percent of Sky it did not already own, but the deal has been repeatedly delayed by the British government and regulators.
Laith Khalaf, senior analyst at Hargreaves Lansdown, said that though the UK market was unloved, a number of factors such as the prospect of higher interest rates spelling the imminent end of the era of cheap money were supportive of M&A activity.
“In the background there is what is happening in terms of the global economy. This year looks to be OK, but if this kind of trade war stuff does escalate, that could put a dampener on things,” Khalaf added.
Worries over global trade and a tumble in U.S. heavyweight tech stocks have hit risk assets such as equities so far this year, while a spate of profit warnings and Brexit-related uncertainties have dented appetite for British stocks.
The FTSE 100 slid in line with the broader European market, with financials, industrials and health stocks shaving the most points off the index.
A rise in the pound also put pressure on large, overseas-earning stocks.
Mining stocks were a bright spot as solid manufacturing data from China, the world’s biggest consumer of metals, boosted the price of copper to a one-week high. [MET/L]
The FTSE’s muted start to the second quarter follows its worst first quarter since 2011, while March saw its third straight month of declines.
Reporting by Kit Rees, additional reporting by Julien Ponthus; Editing by Catherine Evans