Market Report: Dixons and Carphone Warehouse surge as merger nears

Dixons and Carphone Warehouse surged on the mid-cap FTSE 250 index as their £3.7bn merger moved closer. The last major hurdle for the deal was cleared on Thursday when shareholders of both companies approved the tie-up. News filtered through to the markets, with both retailers’ shares rising. Dixons added 1.99p to 49.3p, while Carphone climbed 15p to 318p. Bar any last minute upsets, Dixons Carphone will start trading on 7 August.

The FTSE 100 dipped as traders digested news of the Malaysia Airlines attack in Ukraine. Companies with exposure to the region were hunted out. ITE Group, which organises conferences in Russia and Ukraine, fell 10.9p to 215p, while the Ukrainian copper miner Ferrexpo closed 2.4p lower at 135.5p.

Defensive stocks were also in demand, with Severn Trent rising 40p to 1926p and United Utilities up 12p at 894p. But some optimism crept back in the afternoon session and the Footsie ended 11.13 points down at 6,749.45.

The index was pulled higher by deals, both speculative and completed. The drugs group Shire’s last-minute merger with US rival AbbVie helped it shoot up by 189p to 4996p, while the expectation of a wave of consolidation in the European media sector sent ITV’s shares 7.4p higher to 202.5p and pushed BSkyB up 20p to 917.5p.

British Land added to the positivity after Barclays said the property developer could be worth £2bn more than it previously thought. The bank raised its target price, arguing that the company was set to benefit from rising office rents and property prices. British Land added 17p to 718p.

On the small-cap index, the Czech coal miner New World Resources fell 1p to 11.5p as it announced further plans to force a restructuring of its debt.

The failed bulletproof glass-maker Pentagon Protection resumed trading on the Alternative Investment Market as Yolo Leisure and Technology. The cash shell, backed by the former Leeds United owner Chris Akers and headed by a former Thomas Cook executive, said it was looking for deals in the travel sector. Nevertheless, Yolo’s shares slipped 2.5p to 2.75p on the first day.