British American gets a bit more American

The FTSE 100 is eight points higher in mid-morning trading, as investors concentrate on merger activity.

- BAT makes a play for Reynolds
- Europe remains quiet
- US markets struggle to maintain momentum

Big M&A news in the tobacco world has helped to take the focus off a quiet broader market, with the FTSE barely moved so far this morning. British American’s bold bid for the US firm Reynolds has helped shares in the former to move over 3% higher, as investors look past the hefty price tag and think of the increased market share and revenues that will accrue in the future. Meanwhile rival Imperial Brands has not been entirely left behind, rising 1.5% on expectations that it too might either be forced to look for new acquisitions or, perhaps more plausibly, become a bid target itself. Across the channel, European markets are quiet too, although the falling euro has helped indices make small gains, on expectations that we could see more easing later in the year from the ECB despite a very tight-lipped Mario Draghi at yesterday’s press conference.

US markets have lost some of their bullish tinge over the past 24 hours, as some of the initial optimism from earnings season wears off. While there are some big names reporting today, such as GE, a relatively empty afternoon schedule means that direction may be hard to come by in the final session of the week.