LONDON, July 29 — London stocks rallied today on corporate takeover news but the pound sank to a two-year dollar low on festering Brexit concerns, dealers said.

By the mid-afternoon, the FTSE 100 benchmark index of major blue-chip companies was up two per cent, vastly outperforming its eurozone peers.

Britain’s Just Eat and Takeaway.com of the Netherlands unveiled a plan to join forces to create a heavyweight in the rapidly-growing food delivery sector with around US$8 billion in annual sales.

The combination of the two firms would create a delivery platform worth around US$11 billion capable of competing against Britain-based Deliveroo and Uber Eats of the United States with a strong presence in Britain, Canada, Germany and the Netherlands.

The news sent Just Eat’s share price rocketing by almost a third, topping the FTSE 100 risers board.

The second biggest gainer was the London Stock Exchange after it confirmed talks over a massive US$27-billion takeover of US financial data provider Refinitiv, in a move that would place it in direct competition with Bloomberg.

The takeover, which is worth the equivalent of 24 billion euros and marks a major switch in strategy under LSE CEO David Schwimmer, sent shares briefly spiking to a record.

The stock later pared gains, to show a gain of just over 15 per cent.

The FTSE was also buoyed by the weak pound, which hands a major boost to exporters.

“The FTSE is powering ahead... on merger and takeover news, shrugging off a weak session in Asia where the start of Sino-US trade talks in Shanghai dominated trading sentiment,” said City Index analyst Fiona Cincotta.

In Paris, Peugeot shares topped the fallers board after “the company said it is considering closing down its Ellesmere Port plant in the UK if the plant becomes unprofitable because of Brexit”, Cincotta said.

Chief executive Carlos Tavares told the Financial Times that he would be forced to shut the facility if market conditions turned “bad” as a result of a problematic EU departure.

Wall Street opened steady as investors awaited a key Federal Reserve rate decision this week.

Pound pummelled

Meanwhile the pound tumbled to a dollar level last seen in March 2017 on festering fears that Britain could crash out of the European Union with no deal in place at the end of October.

Prime Minister Boris Johnson has vowed to lead Britain out of the EU on October 31 even if this means doing so without a divorce agreement.

“The pound has gotten off on the wrong foot at the start of the new week,” said XTB analyst David Cheetham.

“Brexit continues to be the dominant theme with a noticeable harshening of the rhetoric in recent days raising concerns amongst traders.”

Asia markets were mostly down today, with investors cautious ahead of US-China talks in Shanghai this week and amid more civil unrest in Hong Kong.

Two-day discussions begin tomorrow with a Washington delegation led by White House Trade Representative Robert Lighthizer.

Hong Kong was among the biggest downward movers today with the Hang Seng falling more than two per cent after a fresh round of violent protests over the weekend, before paring losses.

Key figures around 1330 GMT

London – FTSE 100: UP 2.0 per cent at 7,701.18 points

Frankfurt – DAX 30: UP 0.4 per cent at 12,468.90

Paris – CAC 40: UP 0.2 per cent at 5,623.05

EURO STOXX 50: UP 0.4 per cent at 3,539.46

New York – Dow: FLAT at 27,191.87

Pound/dollar: DOWN at US$1.2267 from US$1.2384 at 2100 GMT

Euro/pound: UP at 90.69 pence from 89.86 pence

Euro/dollar: DOWN at US$1.1124 from US$1.1128

Dollar/yen: DOWN at 108.65 yen from 108.68 yen

Tokyo – Nikkei 225: DOWN 0.2 per cent at 21,616.80 (close)

Hong Kong – Hang Seng: DOWN 1.0 per cent at 28,106.41 (close)

Shanghai – Composite: DOWN 0.2 per cent at 2,941.99 (close)

Brent North Sea crude: DOWN 6 cents at US$63.31 per barrel

West Texas Intermediate: UP 21 cents at US$56.41

— AFP