Must read: FTSE 100, Nvidia, UK retail sales, Asda merger talk

Our head of investment rounds up the morning's big news.

GLOBAL MARKETS 

After another day of declines for the FTSE 100, the UK blue-chip index has opened higher alongside broader gains across Europe.

Miners like Rio Tinto Registered Shares (LSE:RIO), Anglo American (LSE:AAL) and Antofagasta (LSE:ANTO) are at the top of the leader board, rallying to the tune of around 3% each. President Biden and the Republicans are understood to be inching closer to a deal to raise the debt ceiling. 

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Wall Street closed mixed with the Nasdaq outperforming thanks to surging shares of NVIDIA Corp (NASDAQ:NVDA), up over 25% in a single session, extending its year-to-date gain to more than 165%. The chipmaker is expecting sales of $11 billion in the three months to the end of July, potentially putting the business on track to enter the $1 trillion market cap club.

UK RETAIL SALES 

UK retail sales rose by 0.5%, beating analysts’ expectations for 0.3% and swinging from a decline of 1.2% in March, when wet weather dented spending. Three-month growth rose by 0.8%, the fastest level since August 2021. 

Total value increased whereas volumes fell by 3% year-on-year, suggesting that price rises were largely responsible for the retail sales growth. Total retail sales were 16.5% higher than February 2020 pre-pandemic whereas volumes are 0.8% lower, underscoring inflation’s impact on the retail sector. Increased volumes of food and non-food items offset declines in spending on automotive fuel.

ASDA

Asda and EG Group is reportedly expected to announce a £10 billion merger. According to Sky News, the deal between the supermarket and the petrol stations group could be confirmed as soon as today.

Discussions about a potential tie-up between the two which are both owned by private equity house TDR Capital first emerged through a Sunday Times report earlier in the year. Sky said the deal would ‘accelerate Asda’s drive into the convenience store sector’ and would be ‘the biggest deal in financial terms in the career of Lord Rose of Monewden’, chair of Asda and EG Group. 

Asda is currently the third largest UK supermarket by market share according to Kantar with 13.9% of the market, having enjoyed a boost during the cost-of-living crisis thanks to its Just Essentials range which has resonated with the increasing number of price sensitive consumers. A deal with EG Group would create a supermarket, convenience store and petrol forecourt giant with annual revenues of almost £30 billion, expanding Asda’s footprint in this highly competitive market.