London markets slumped after the Sainsbury’s and ASDA merger was declared dead and Barclays’ investment bank sputtered in the first quarter.
How did markets perform?
The FTSE 100 UKX, -0.30% fell 0.4% to 7,445.1. It ended Wednesday’s trading down nearly 0.7%.
The pound GBPUSD, -0.2171% fell 0.1% to $1.2886, erasing Wednesday’s rise of 0.1%.
What’s moving the markets?
U.K. Prime Minister Theresa May once again avoided a personal defeat when a committee of backbench Conservative Party MPs decided not to pursue rule changes that would allow a leadership challenge before December. She was on track for a fourth major Brexit defeat for her government, however, as speculation heated up that the thrice-defeated withdrawal agreement would be put before parliament again next week.
Which stocks are active?
Supermarket chains Sainsbury’s and the Walmart Inc.-owned ASDA decided to drop their merger plans after the U.K.’s Competition and Markets Authority decided to block the deal. Sainsbury’s CEO Mike Coupe was highly critical of the regulator’s decision, specifically their contention that the merger would raise prices for consumers. “The CMA’s conclusion that we would increase prices postmerger ignores the dynamic and highly competitive nature of the U.K. grocery market. The CMA is today effectively taking £1 billion out of customers’ pockets.” J Sainsbury SBRY, -4.85% hares fell 5.4% on the news.
Barclays Bank PLC BARC, -1.89% joined the procession of global banks reporting that their investment bank units were a drag on first-quarter earnings. Net profit in the British lender’s corporate and investment bank fell 28% year on year, a defeat for CEO Jes Staley who is fighting to maintain his commitment to the investment banking franchise amid a challenge from an activist investor. Shares were down 1.5%.
Royal Bank of Scotland PLC CEO Ross McEwan is stepping down RBS, -1.29% and will remain in the position for up to 12 months until a successor is found. Alison Rose, the bank’s head of commercial and private banking, has been frequently cited as the top candidate for the CEO job. Shares fell 0.8%
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