London midday Stocks fall tensions rise Malaysia Airlines crash Financial News

Markets react to Malaysia Airlines plane crash and Gaza fighting, Shire and AbbVie strike deal, UK competition watchdog orders banking probe.

Global markets experienced a significant impact on Friday due to a combination of factors, including the tragic shooting down of a Malaysia Airlines plane in eastern Ukraine and ongoing conflict in Gaza. These geopolitical tensions have led to a decrease in UK stocks, with the FTSE 100 down by 0.5% at midday. The crash of the Malaysia Airlines plane, which resulted in the loss of 298 lives, has sparked demands for answers from leaders worldwide. While Ukraine has accused pro-Moscow rebels of being responsible for the attack, Russia's Defence Ministry has pointed fingers at Ukrainian ground forces. Additionally, the Israeli military's decision to send ground troops into Gaza to combat Palestinian militants has further dampened market sentiment.

Despite these challenges, the market losses have not been as severe as anticipated, with Market Analyst Craig Erlam noting that uncertainty surrounding future developments is preventing a significant sell-off. The President of the St Louis Fed, James Bullard, also hinted at a potential need for the central bank to raise interest rates sooner than expected, citing positive economic data as a driving factor.

In the midst of these geopolitical tensions, US drug company AbbVie announced a £32 billion takeover deal with UK-based Shire, causing a surge in Shire's shares. The deal, valued at £53.19 per share, represents a premium of about 53% to Shire's share price on May 2nd. Meanwhile, airlines like IAG experienced fluctuations in share prices following the Malaysia Airlines crash, with British Airways confirming that its flights were avoiding Ukrainian airspace.

On the other hand, British banks, including RBS, Barclays, Lloyds, and HSBC, faced declines after the UK competition watchdog ordered a probe into the industry's personal current accounts and small business banking practices. This move came after the Competition & Markets Authority highlighted that these services were not meeting customer expectations.

Amidst these market fluctuations, companies like Barratt Developments and ITV saw changes in their stock performance, with Barratt Developments leading the fallers on the FTSE 100 after a downgrade from Liberum. Conversely, ITV continued to see gains following bid speculation fueled by a recent stake purchase by Liberty Global.

Overall, the market landscape remains uncertain and volatile, with various external factors contributing to fluctuations in stock prices. Investors are advised to closely monitor developments and stay informed to make well-informed decisions in the current market environment.