FTSE 100 hits all time high, takeover talks & oil price hikes: Month in the Markets

A look at the Markets in May, from Graham Spooner

Article updated: 30 May 2018 12:00pm Author: Graham Spooner

  • Stock markets in May were volatile, trending higher over the first part of the month, as sterling continued to weaken, followed by declines on the back of concerns over Italy and Spain.
  • The FTSE 100 hit an all-time high on the 22nd and there was much excitement amongst some market watchers who were predicting a quick march to and through the 8,000 level.
  • This was followed by the biggest fall in the FTSE for two months and some profit taking in income shares on thoughts that rising sovereign debt yields would act as a dampener.

Companies where take-over rumours have circulated include; Inmarsat, On The Beach, AstraZeneca, ITV (as a result of Liberty deal with Vodafone), G4S (possible break up), further consolidation amongst challenger banks on the approach for Virgin Money from CYBG and for the pharmaceutical sector on the approach for Shire from Takeda. Although we are not in the silly season for news, one story that was doing the rounds was a merger between Barclays and Standard Chartered. Sector analysts were quick to pour cold water over the idea.

Drivers will have noticed the rise in the price of filling up the car. The oil price hit a three year high as the US pulled out of the Iran nuclear deal and political turmoil in Venezuela.

Retailers continued to suffer, with profit warnings from Dixons Carphone and Dunelm. The impact from the Beast from the East followed by spells of too hot weather hit Dunelm. The ability to shop without leaving your front room is obviously making the UK consumer a more fickle individual. Linked to the sector is Ocado Group, who caught out short sellers and others who have questioned its growth potential, with news of a significant deal with US group Kroger. The shares shot up an eye-watering 45% on the day.

Looking ahead to June I wonder if markets might be distracted by the World Cup, no doubt some retailers will be substituting wrong weather with football. Like most good sale offers I think for England fans it will be a case of catch them while you can.

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Graham Spooner

Investment Research Analyst

Graham started out as a fully authorised dealer on the Stock Exchange trading floor and for various banks, before becoming an FSA-approved investment adviser. Now a respected voice in the media, Graham’s share tips and comments on the markets are frequently sought by the national press.