LONDON (Reuters) - Resurgent fears of a protracted and costly trade war dented the FTSE 100 on Monday, while M&A stole the spotlight with Comcast finally clinching a takeover of Sky, and Randgold Resources agreeing a tie-up with Barrick Gold.
Britain's top stock index .FTSE was down 0.4 percent as miners and consumer multinationals sold off.
Antofagasta (ANTO.L), Glencore (GLEN.L), Anglo American (AAL.L), Rio Tinto (RIO.L) and BHP Billiton BLT.L fell between 0.3 and 2.6 percent as metals prices reversed course on the resurgence of trade worries.
London copper eased from a ten-week high as holidays in China and Japan thinned trading.
Dealmaking drove some of the biggest moves. Europe’s largest pay-TV group Sky SKYB.L soared after Comcast’s offer won an auction for the company with a $40 billion bid.
Sky shares jumped 8.6 percent to 17.21 pounds, just below Comcast’s cash offer of 17.28 pounds a share.
“The Comcast offer represented a 9 percent premium to the share price close on Friday and more than double the 765p share price Sky had been trading at before the initial offer from Fox in December 2016,” wrote Liberum analysts.
They added that they don’t expect significant changes for Sky. “It is very unlikely Comcast will look to rebrand Sky, it has pledged to keep Sky News and there is visibility on the major football contracts.”
Randgold Resources RRS.L shares jumped 6 percent after the miner agreed a deal with Canada’s Barrick Gold (ABX.TO) to create the world’s biggest gold miner.
“The larger scale will provide greater ability to grow, where the assets merit being developed,” wrote Investec analysts.
“In this regard the company will have a greater pipeline of large development opportunities, whereas Randgold previously only had Massawa, an asset that many in the market remained sceptical of,” they added.
Among mid-caps, Thomas Cook Group (TCG.L) lost nearly a third of its market value, down 28.1 percent at the bottom of the FTSE 250, after slashing its profit outlook, blaming a heatwave in northern Europe for a slower late holiday season.
Shore Capital analysts lowered their recommendation from “buy” to “hold”.
“Assuming a more normal trading environment we would expect some of this year’s shortfall to be recovered, although the winter is likely to be tougher,” they wrote.
Thomas Cook peer TUI (TUIT.L) also fell 2.9 percent.
The FTSE 100, dominated by exporters which gain from a weaker currency, has been in the thrall of the pound recently as Brexit negotiations intensified. The currency’s rise on Monday kept the FTSE under pressure.
Sterling gained after UK Brexit Secretary Dominic Raab said he was confident Britain would eventually clinch a Brexit deal with the EU.
Limiting losses on the index, however, were oil majors BP (BP.L) and Royal Dutch Shell (RDSa.L). Crude prices rose to a four-year high after Saudi Arabia and Russia ruled out any immediate increase in production.
Reporting by Helen Reid and Danilo Masoni; Editing by Mark Potter and Andrew Heavens