GVC lines up Ladbrokes Coral again

By David Madden
CMC Markets

Equity markets in Europe are cautiously optimistic this morning, as the strong finish in Asia overnight has lifted sentiment.

European equity markets have struggled to hold onto gains recently, but for the time being traders are optimistic.

GVC Holdings announced it is in advanced talks with Ladbrokes Coral about a potential takeover, and the deal could be worth up to £3.9 billion. The government is conducting a review of fixed-odds betting terminals, and the outcome is likely to be a deal breaker. Shares in GVS holdings are up 5.4% – and hit a record higher today. While Ladbrokes Coral’s shares surged by 25.6%, and hit a level not seen since January 2014.

Legal & General stated it expects to post a record profit this year as the company had ‘great momentum’. In a trading statement, the insurer revealed that gross written premiums, general insurance premiums and assets under management have increased. The share price has been creeping higher since June 2016, and if the bullish sentiment continues it could target 280p.

EUR/USD is largely unchanged on the day as there has been little movement in the US dollar. The disappointing German industrial output figures failed to dent the single currency, which suggests the euro is being dragged around by the dollar. In October, German industrial output fell by 1.4%, while traders were expecting a reading of 1%. The eurozone will announce the third-quarter growth figures at 10am (UK time) and the consensus is for a reading of 2.5%.

GBP/USD is slightly weaker as traders are still tetchy about the lack of political clarity in relation to Brexit. The Irish border issue appears to be a roadblock in the talks, and until politicians answer the Irish question, traders could be reluctant to buy the pound. UK house price increased by 0.5% in November on a month-on-month basis, according to Halifax, but the market reaction was muted.

At 1.30pm (UK time) the US will announce the initial jobless claims report, and economists are expecting it to tick up to 240,000 from 238,000 last week.

We are expecting the Dow Jones to open up 32 points at 24,172, and we are calling the S&P 500 up 4 at 2633.

Dell Technologies will announce their third-quarter results today.