Must read: stocks tumble, BHP/Anglo, Kingfisher, cryptocurrencies

GLOBAL MARKETS

European markets are in the red taking their cues from declines in Asia overnight. The Hang Seng has shed over 2% despite gains on Wall Street, with the Nasdaq hitting record highs, fuelled by a rally for AI darling NVIDIA Corp (NASDAQ:NVDA) ahead of its results tomorrow.

UK investors await a lecture from the Bank of England’s governor Andrew Bailey later today as well as UK inflation figures tomorrow.

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CRYPTOCURRENCIES 

Cryptocurrencies have been on a tear so far this week. Ether rose 13.3% on Monday amid speculation that a spot ether exchange-traded fund (ETF) could be approved by the US regulator.

Bitcoin is also gaining ground, breaking above resistance at $70,000. After an extremely strong first quarter, bitcoin peaked in March and drifted lower afterwards. But May has seen a return to bullish price action with gains accelerating this week, heading back towards its all-time high when the price surpassed $73,000 in March. A break above that level could encouraging further buying and push the cryptocurrency to fresh record highs.

BHP / ANGLO AMERICAN 

All eyes are on BHP Group Ltd (LSE:BHP) ahead of its 4pm deadline tomorrow under UK takeover rules to make another formal bid for rival miner Anglo American (LSE:AAL). The clock is ticking and deliberations are no doubt underway at BHP around whether the company will return with a sweetened offer or simply walk away. 

So far Anglo has rejected two all-share proposals from BHP. Nonetheless, M&A speculation is supporting shares in BHP which are trading at three-month highs and Anglo American is in the red having gained 35% so far this year amid the deal hype, helping to lift the broader FTSE 100.

A tie-up would create the industry’s biggest deal in over 10 years, building the world’s biggest copper producer, equating to around 10% of the global market. Anglo’s copper assets are in high demand because of their importance in the green energy transition as well as the metal’s significance in the artificial intelligence (AI) revolution too. However, BHP’s bid for Anglo has sparked concerns that London would lose another important listed company, adding to the narrative that UK Plc is facing a mass exodus.

KINGFISHER

B&Q’s parent company Kingfisher (LSE:KGF) reported a 0.9% drop in first-quarter underlying sales but kept its full-year guidance unchanged. It continues to forecast adjusted pre-tax profit for the year of between £490 million and £550 million, a year-on-year decline of around 8.5%. 

Kingfisher enjoyed strong e-commerce sales at B&Q in the UK. However, its performance was dragged down by weakness in France at Castorama and Brico Depot because of the sluggish consumer backdrop. Retail spending on big ticket items is suffering because of a reluctance from consumers to fork out for expensive products amid cost-of-living pressures from higher prices and higher interest rates. Kingfisher has also been dealing with unfavourable weather conditions, especially in April in the UK and France. 

Shares in Kingfisher are up almost 10% so far this year but are in the red today. The analyst community has a mixed assessment on the stock with 4 sell recommendations, 7 holds and 4 buys.