LONDON (The Deal) -- European and Asian markets seemed intent on ignoring geopolitics this morning and focused instead on interest rates. The assumption is that weak economies and signs of incipient inflation will force central banks to continue keeping borrowing costs low. All the main markets were taking the glass-half-full view after a volatile week.
Even so, the U.K.’s revelation of 0.8% GDP growth in the second quarter -- pushing up forecast annual growth to 3.2% -- seemed not to revive the fears of an early interest rate rise, which dovish remarks from Bank of England governor Mark Carney had dampened on Thursday.
In London and Sydney, Anglo-Australian miner BHP Billiton (BHP) soared after it announced that a demerger of its non-core assets and a decision to concentrate on copper, iron ore, coal and petroleum was its preferred option. It said potash was a potential fifth pillar. The company’s said its board will be meeting Monday to discuss the options. BHP Billiton closed up 2.33% at A$39.05 in Australia and was up 1.99% in London at 2,080 pence a share.Also in London, beleaguered construction and infrastructure group Balfour Beatty (BAFBF) was up 2.11% at 241.50 pence after a blistering response to claims of £175 million ($292 million) in synergies from a merger it rejects, from its still-pestering suitor Carillion. Balfour accused Carillion of planning to cut Balfour’s U.K. construction revenues by up to two-thirds following a proposed $5 billion all-share merger, and so overdoing the cost-cutting that it would undermine Carillion’s chances of achieving the synergies it claims. Carillon’s stock rose even more -- up 6.25% to 340 pence. It has until Aug. 21 to make a formal offer or walk away. Meanwhile Irish banana company Fyffes (FYFFF) was up 2.04% at 75 pence, after its planned U.S. merger partner Chiquita (CQB) rejected a rival offer from Brazil’s Cutrale and Safra groups. In Frankfurt, German airline Lufthansa (DLAKY) soared 2.88% on rumors that parts of the governing coalition want to offer airport tax exemptions for airlines that buy less polluting, quieter aircraft. Read More: J.C. Penney Shocks Wall Street Again, Shares Pop in After-Hours In London, the FTSE 100 was up 0.59% at 6,724.43, while in Frankfurt, the DAX rose 0.91% to 9,309.33. In Paris, the CAC 40 picked up 0.7% to 4,235 and Moscow’s MICEX Composite was up 0.14% at 1,408.3. In Asia, the Shanghai Composite ticked up 0.92% to 2,226.73, while Hong Kong’s Hang Seng put on 0.62% to 24,954.94. In Tokyo the Nikkei 225 was up a mere 0.02% at 15,318.34, while in Sydney, the S&P ASX200 was up 0.33% at 5,566.52.