European shares rise after last week's selloff while French stocks slide
European shares overall have risen after last week’s sell-off, while the French stock market and the euro are under pressure from fiscal fears and losses in Schneider Electric following a record deal.
The pan-European Stoxx climbed 0.4% this morning after its biggest weekly loss in a month, as soaring bond yields fuelled concerns over worsening government finances.
France’s CAC fell 1%, and the euro hit a 17-month low, as investors worried about the eurozone’s second-largest economy’s debt burden and political gridlock ahead of next year’s presidential election.
Shares of Schneider Electric slumped 8.9% after the French engineering company struck its biggest deal ever, the $22.6bn acquisition of the US software company PTC.
The Spanish stock market rose 0.7% after Pedro Sanchez, the prime minister, called a snap election for 29 November to end parliamentary deadlock, amid a national housing crisis. You can follow the latest news here:
German engineering orders slump 5%, VDMA says
In Germany, engineering orders tumbled in August because there were no big orders, according to industry figures.
Orders in Germany’s mechanical and plant engineering sector fell 5% in real terms in August from a year earlier, after two months of growth, the industry association VDMA said.
Domestic orders fell 2%, while foreign bookings slumped 6%.
Orders from other eurozone countries sank 10%, twice as big as the decline in orders from countries outside the currency bloc. VDMA chief economist Johannes Gernandt said
After two months of growth, this result is a slight dampener. However, it should be noted that, unlike a year ago, there were no large plant orders in August this year.
The sector posted a 4% increase in orders in the first eight months of this year, although Gernandt said that was partly due to a weak year-on-year comparison and a high volume of large orders booked in March and June.
Between June and August, orders rose 7%. Foreign demand increased 11%, offsetting a 1% decline in domestic orders. Orders from non-euro countries rose 19%, while bookings from euro zone countries fell 9%.
BT shares rose 1.6%, catapulting the company into the top risers on the FTSE 100 index this morning.
Here’s a statement from the administrators, Alvarez and Marsal, who said 900 jobs had been saved at TalkTalk.
The deal includes the TalkTalk Telecommunications Limited consumer business, and the wholesale PlatformX Communications Limited (PXC) division.
Andrea Jakes, joint administrator and managing director of Alvarez and Marsal said:
Allison Kirkby, BT’s chief executive, described it as an “exceptional situation”.
Speaking on BBC radio 4’s Today programme, she said:
She said she would be
While the competition watchdog will look at the deal, she said:
UK intervenes in BT's TalkTalk takeover, citing risks to public services and vulnerable customers
The UK’s culture Lisa Nandy stepped in to intervene in BT Group’s acquisition of TalkTalk, citing risks to public services and vulnerable customers if the broadband provider’s services were disrupted.
She said the government was concerned because a long sale process had not led to an agreement with a number of potential buyers.
She said:
Nandy’s department said it was acting under Enterprise Act powers after BT agreed to acquire TalkTalk out of administration. This will allow her to consider the wider public interest once the Competition and Markets Authority has reported on competition concerns. She directed the CMA to report back to her by 19 October.
TalkTalk’s customers do not need to take any action, and services should continue as normal. Customers will be contacted directly if there are any changes they need to know about.
Clive Selley will lead the stabilisation and integration planning of the acquisition, BT said. He was appointed as head of BT’s international business in April, after running Openreach for more than 10 years.
Martijn Blanken will take over his role as CEO of BT International, in addition to being CEO-designate of BT’s proposed international joint venture with Verizon.
BT estimates the total cash impact of the acquisition at £400m, comprising transaction and administration costs as well as a trading loss of £60m and non-receipt of £100m otherwise due to Openreach.
Introduction: BT strikes deal to rescue broadband firm TalkTalk; euro slides amid France debt burden fears
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
BT Group has struck a deal to buy TalkTalk out of administration, saving 900 jobs.
TalkTalk’s wholesale and consumer arms will be sold to BT on a debt-free basis. BT said the acquisition would cost it £400m.
BT said it “recognised the risk to the country, and especially vulnerable customers and key public services, should the company collapse”. BT therefore approached the directors of TalkTalk and offered to step in immediately.
By acquiring the business out of administration, BT said it would be providing reassurance for TalkTalk’s employees, its 1.5 million retail customers and its 1 million wholesale customers across the UK. This includes vulnerable households, and connections that support critical national infrastructure providers across health, emergency services, defence, education, transport, banking and government.
During the last 12 months, TalkTalk reported revenues of £1.2bn and was loss-making.
Allison Kirkby, BT’s chief Executive, said:
TalkTalk, the UK’s fourth-largest broadband company was founded in 2003 by Charles Dunstone as a subsidiary of Carphone Warehouse. It has struggled in the highly competitive telecoms market, with its customer numbers shrinking from 4 million in 2019 to about 1.5 million.
In financial markets, the euro sank to a 17-month low amid concerns over France’s debt burden. The currency tumbled more than 0.8% to $1.1161 in Asia, and is now trading 0.5% lower at $1.1192.
The Agenda
9am BST: Eurozone Services and Composite PMIs final for September
9.30am BST: UK Services PMI final for September
3pm BST: US ISM Services PMI for September
