British stocks on Monday enjoyed their best single-day performance in six months as the pound collapsed on concerns the U.K. will leave the European Union without an agreed-upon deal.
The FTSE 100 UKX, +1.82% rallied 1.82% to 7,686.61, the best gain of the major European stock markets. The pound tumbled through the $1.23 level to a two-year low as the new Boris Johnson government stepped up plans to leave the EU in a so-called no-deal Brexit.
Traders also flocked to bonds, as the yield on the benchmark 10-year Gilt TMBMKGB-10Y, -4.72% fell 4 basis points to 0.65%.
Read: British pound falls below key level, reaches new two-year low on no-deal Brexit concerns
The M&A news didn’t inspire the action across the Atlantic as U.S. stocks DJIA, +0.17% traded in a tight range. The U.S. Federal Reserve is due to cut interest rates on Wednesday, with the markets unsure whether the rate cut will be a quarter-point or a half-point.
In its first major deal since ex-Goldman Sachs executive David Schwimmer took the reins as CEO, the London Stock Exchange Group LSE, +15.34% said it’s in talks to buy Refinitiv, owned by Blackstone BX, -0.91% and Thomson Reuters TRI, -3.17%, in a $27 billion deal to bulk up its offerings of financial data and infrastructure. LSE shares jumped nearly 15%.
Also read: Five things you need to know about the LSE-Refinitiv merger
Analysts at UBS, who rate LSE at neutral, said the deal would lift LSE earnings by 8% in its first year and by 20% in year three, excluding any refinancing benefits.
Just Eat JE, +22.72% jumped 23% to 780 pence after it and Takeaway.com TKWY, -0.48% announced merger talks, in a deal where the Dutch-listed group would buy the U.K.-listed company in a stock swap valuing Just Eat, using Friday’s closing prices, at 731 pence a share. Activist investor Cat Rock has stakes in both food delivery companies and has been reported to be pushing for a deal.
Heavyweight Vodafone Group VOD, +4.27% VOD, +1.29% extended last week’s gains from announcing it may sell its European towers business, with shares rising another 4.3% on Monday.
Ferguson shares FERG, +2.31% rose 2.3% as Sky News reported that Nelson Peltz’s Trian has urged the plumbing products distributor to sell its U.K. business.