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FTSE extends losing streak as AZ Electronic soars

FTSE extends losing streak as AZ Electronic soars

UPDATE: The FTSE 100 slipped towards its fifth consecutive day of losses, falling in line with other European indices, as investors sulked over central bank policy.

The European Central Bank failed to provide any further stimulus measures at its December policy meeting, after having cut rates last month.

And in the US, third quarter GDP was revised up to 3.6% from a previous estimate of 2.8%, giving investors reason to fret that ‘tapering’ of the Federal Reserve’s stimulus programme may come sooner than later.

Britain’s FTSE 100, down slightly at 6,507, looked set to end lower for a fifth day, which would be its longest losing streak since April.

UK financial markets were little moved by chancellor George Osborne’s Autumn Statement, in which he said the UK would run a budget surplus by 2018. The Bank of England, as expected, kept its monetary policy unchanged.

The pound fell against the US dollar, off 0.4% to $1.6310, but that probably better reflects US dollar strength rather than reaction to Osborne’s comments.

Of London shares, AZ Electronic Materials remained the day’s star performer: see morning report below.

Bid target AZ Electronics soars as FTSE flat-lines (09:40)

AZ Electronic Materials (AZEM.L) shone on otherwise apathetic financial markets, with shares shooting up 51% after a bid offer from German drug-maker Merck.

The huge gains for the maker of chemicals for microchips and displays for iPads contrasted with a flat FTSE 100.

AZ’s jump to 399p came after Merck made a cash offer of 403.5p for the company, representing a 53% premium to Wednesday's closing price. AZ's directors 'consider the terms of the offer to be fair and reasonable' they said.

‘While a counter bid cannot be ruled out the offer price seems fair and the significant premium may deter others from bidding,’ commented analysts at Liberum.

Investors elsewhere meanwhile were treading water as they awaited major economic updates from Europe and the US.

Tesco (TSCO.L) was the biggest blue chip faller, down 2.2% to 332p as analysts reacted to yesterday's report of a 1.5% decline in third quarter UK sales from the supermarket group. Morrison (MRW.L) and Sainsbury (SBRY.L) followed the UK's market leader lower.

The FTSE 100’s lack of movement, trading at 6,513, came after four consecutive days of losses.

Declines in global markets yesterday were worsened by surprisingly positive US ADP jobs numbers, which made investors worry that the US Federal Reserve could still start cutting back on the scale of its stimulus this year. 

Investors are now looking ahead to tomorrow’s US jobs data, when non-farm payrolls report and the all-important unemployment rate are published.

In the eurozone, investors are watching to see whether the European Central Bank follows last month’s rate cut with any further action to pump-prime the still slow economy. More likely, say economists, are supportive comments from ECB chief Mario Draghi.

The pound was down 0.1% against the US dollar at $1.6358 on a big day for the UK economy. While the Bank of England is not expected to announce any changes to policy when it concludes its monthly meeting today, all eyes will be on chancellor George Osborne when he delivers his Autumn Statement.

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