The FTSE 100 closed higher on Monday, rising 35.99 points or 0.3% to 10,497.94, while European markets delivered a mixed performance across the session.
France’s CAC 40 (^FCHI) bore the brunt of selling pressure, falling 0.8%, as political and fiscal concerns continued to weigh heavily on investor sentiment toward the eurozone’s second-largest economy.
Germany’s DAX 40 (^GDAXI) fared better, edging up 0.1% in Frankfurt, though gains remained modest amid broader caution across the continent.
The FTSE 250 slipped 70.49 points or 0.3% to 24,123.75, while the AIM All-Share index declined 3.44 points or 0.4% to 780.31.
A sharp 10% drop in Schneider Electric (SU.PA) was the single biggest drag on the CAC 40, triggered by the French industrial giant’s 23 billion dollar swoop for industrial software firm PTC (PTC), which surged 33.79% on the news.
RBC Capital Markets analyst Mark Fielding questioned the timing of the acquisition, noting that “valuation of industrial software assets has been under pressure due to AI concerns and while we think this is largely misplaced, it does not change the fact (the deal) will increase Schneider’s exposure to this concern.”
Fielding added that “integration will likely be complicated and it will likely also see the market revisit capital allocation discussions,” signalling wider scepticism about the deal’s near-term impact.
Political and fiscal worries across Europe kept government bond yields elevated and applied sustained downward pressure on the common currency throughout the session.
David Morrison, analyst at Trade Nation, explained this pressure comes “as concerns mount over the state of the French economy, as inflation, rising government bond yields, civil unrest and this month’s Budget hove into view.”
Morrison also highlighted that “the yield on France’s 10-year government bond (OAT) is now 100 basis points above the German 10-year Bund, and also significantly above those of Italy and Greece,” underscoring the scale of market anxiety.
The euro fell to 1.1193 dollars from 1.1260 dollars, while sterling firmed to 1.1792 euros from 1.1750 euros, reflecting the pound’s relative resilience against its continental peer.
The pound was quoted at 1.3218 dollars on Monday, down slightly from 1.3233 dollars at the same time on Friday, suggesting limited appetite for sterling on the dollar cross.
In the US, the Institute for Supply Management’s services purchasing managers’ index eased to 54.9 points in September from 55.4 in August, though the sector remained in expansion for a 27th consecutive month.
The prices index within that report rose to 74.0 points from 72.6, its highest level since July 2022, pointing to persistent inflationary pressure within the American services economy.
Analysts at Barclays said the report points to continued resilience in activity and demand, adding that “the dominant signal is about persistent cost pressures, with prices paid firming amid energy price gains and respondents stressing ongoing supply chain pressures.”
US Treasury yields pushed higher, with the 10-year yield quoted at 5.33%, up from 5.26% on Friday, and the 30-year yield rising to 5.68% from 5.61%.
Back in the UK, S&P Global’s composite purchasing managers’ index slipped to 52.0 points in September from 52.5 in August, marking a three-month low for private sector activity.
S&P Global noted that “rates of input cost and output price inflation recorded by private sector firms reached the highest since June, largely due to higher energy, fuel and transport bills.”
On the FTSE 100, Ithaca Energy rose 2.2% after agreeing to buy a portfolio of offshore oil assets in Canada from Suncor Energy for up to 1.11 billion dollars, comprising an initial payment of 860 million dollars plus contingent consideration of up to 250 million dollars.
AJ Bell investment director Russ Mould called the deal a potential “planting the flag moment” in North America for the Aberdeen-based company, which is acquiring its first assets outside the North Sea.
BT Group climbed 1.4% after announcing a deal to rescue TalkTalk Telecommunications and PlatformX Communications out of administration, with total cash impact in financial 2027 expected to be around £400 million.
The UK Government has asked the Competition and Markets Authority to investigate the BT deal within a two-week deadline, adding a layer of regulatory uncertainty to the transaction.
Metlen Energy & Metals advanced 2.1% after signing a long-term supply agreement with a major Japanese chemical company covering up to 16% of its annual gallium production from its facility in Greece.
On the FTSE 250, CMC Markets climbed 6.7% as chief executive Peter Cruddas disclosed he had purchased £1 million worth of shares on Friday, delivering a public vote of confidence in the business.
Brent crude oil was quoted at 102.32 dollars a barrel in London, up from 100.50 dollars late Friday, while gold edged lower to 4,137.43 dollars an ounce from 4,143.18 dollars.
Later in the week, Shell is due to release a trading statement while Tesco is set to publish half-year results, giving investors further data points on both the energy and retail sectors.