MARKET REPORT

A jump in GKN shares helped buoy the FTSE 100 after the engineering giant agreed to a merger involving its automotive business in a move meant to stave off a hostile £7.4bn takeover bid by Melrose.

London’s blue chip index ended the day up 0.3% or 21.27 points at 7,224.51 points, with GKN among the biggest risers, up 13.7p at 435.1p.

It comes amid news that specialist car part manufacturer Dana will pay $1.6bn cash to GKN as part of a deal to combine with GKN’s Driveline division, which booked £377m in profit last year on revenues of £5.3bn.

Under terms of the agreement, Dana shareholders will own 52.75% of the company and GKN the remainder, with the combined company set to be domiciled in the UK as Dana - which will continue to trade on the New York Stock Exchange.

In currency markets, the pound was trading higher against the US dollar, up 0.3% at 1.385, and rose 0.3% versus the euro to 1.124 as investors digested a raft of data released by the Office for National Statistics on Friday.

Michael Hewson, chief market analyst at CMC Markets UK, said: “The pound has had a fairly decent week ahead of next week’s spring statement, with the latest economic data pointing to a fairly decent rebound in economic activity in January.

However, he noted that “the data wasn’t all good with the trade balance still showing little signs of improving.”

Across Europe, the French Cac 40 closed higher by 0.4% while the German Dax ended the day in the red, down 0.07%.

The biggest risers on the FTSE 100 were NMC Health up 152p to 3,514p, Ashtead Group up 65.5p to 2,010p, GKN up 13.7p at 435.1p, and Rentokil Initial up 8.1p at 272.4p.

The biggest fallers on the FTSE 100 were WPP down 26p to 1,204.5p, Paddy Power Betfair down 115p to 7,885p, Shire down 36p to 3,192.5p, and National Grid down 7.9p at 783.7p.