Markets choppy ahead of UK inflation data, Unilever tops FTSE 100, AstraZeneca snaps up Fusion in $2.4 billion deal and Ted Baker staring into high street abyss

“It’s been a choppy day on London markets, with investors hyper aware that they could be in for a bumpy ride over the next couple of days,” says AJ Bell Head of Financial Analysis Danni Hewson.

“The consensus is that inflation will have fallen in the next set of figures out tomorrow morning and that the Bank of England will continue its rate freeze. But if the past couple of years have taught us anything it’s that inflation is wily and central bankers can sometimes go off script.”

Unilever

“Unilever has topped the FTSE 100 after announcing thousands of job cuts and doubling down on its promise to do fewer things better and with greater impact.

“To that end its decision to spin off its ice cream business has succeeded in doing two things. It’s shown investors that Hein Schumacher is seriously focused on delivering what he’s promised and it’s set the jungle drums beating about where this tasty new company might decide to call home.

“Will London be able to beat away amorous advances from New York and Amsterdam or will this be another disappointment for UK markets?

“There’s little doubt that a full court press will be forthcoming, with whoever sits behind the desk at number 11 in a couple of years’ time taking point. But this is exactly the kind of company UK investors understand and exactly the kind of listing that should be a no-brainer if London is to stay competitive.”

Astrazeneca

“Investors love cost cutting as they can see quick wins on the horizon. They are less keen when companies pay what seems to be a premium to acquire other companies, so it wasn’t surprising to find AstraZeneca amongst the day’s FTSE 100 fallers after it announced it was shelling out up to $2.4 billion for Fusion Pharmaceuticals.

“AstraZeneca has been splashing the cash over the past week, spending $3.5 billion on two companies to fill its ever-important pipeline of treatments that will drive earnings in the future.

“Drug companies have learned their lesson from patent cliffs that they cannot rely on blockbuster treatments forever. They need to keep the pipeline stocked up, acting like a conveyer belt so something else comes along just as an existing treatment loses patent protection and earnings fall victim to generic copycats.

“And Fusion gives AstraZeneca a buy in to a market that’s already being explored by its competitors. The pharma giant will have kicked the tyres thoroughly to ensure its new acquisition works alongside its existing operations, harnessing knowledge and techniques that can be further exploited.

“Medicine is constantly evolving and today’s patient is hyper aware of the next big development that could make their treatment more successful and less invasive.”

Ted Baker

“It’s a day for speculation and there will be plenty watching to see if Next or Frasers Group are waiting in the wings to snap up beleaguered fashion retailer Ted Baker.

“The bastion of flowery frocks for fabulous events struggled during the Covid era when no one had anywhere to go that required splurging on a statement piece of clothing to impress. It also went through the mill after allegations about its founder’s behaviour led to his resignation in 2019.

“Instability seemed to have finally been put in the rear-view mirror two years ago when it was brought into the Authentic Brands universe, but today that instability returned with a vengeance.

“Authentic says it’s in advanced stages to find a buyer for the brand but it seems job losses are inevitable. It’s likely the high street will be saying goodbye to another old friend, with future shop windows set to be virtual only.”

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