What to Watch: Bovis and Galliford Try talks, athleisure boost JD Sports, and Germany stimulus

Tom Belger
Finance and policy reporter
A Bovis Homes construction site at Portland Great Park, Nottinghamshire

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:

Bovis and Galliford Try in £1.08bn merger talks

Galliford Try’s (GFRD.L) shares soared to a six-month high on Tuesday after it resumed talks with rival Bovis Homes (BVS.L) over a potential merger with its housing arms.

Shares in Galliford Try were up 12.8% at around 10am in London, making it the biggest riser among UK stocks. But Bovis was one of the biggest fallers, as its shares slumped almost 4% on the news of further talks.

READ MORE: The single biggest issue driving UK property prices

The deal would value Galliford Try’s housing division, Linden Homes and Partnerships & Regeneration, at £1.08bn ($1.34bn). The rest of Galliford would remain separate as a listed construction firm.

But the companies stressed talks were at an early stage, after previous talks over a full merger collapsed two years ago and Galliford dismissed a £950m bid in May.

Profits grow at JD Sports as it targets youth

Profits rose at JD Sports. Photo: PA

The UK’s largest sports fashion retailer JD Sports (JD.L) has seen its pre-tax profits rise 6.6% in the first half of the year.

It has seen results from its focus on youth, gymwear and the growth of athleisure, the growing trend for sportswear to be worn casually and at work.

Its pretax profits were up to £129.9m ($160m) for the six months to 3 August, while revenue for the group, which also owns Footpatrol and Cloggs, was up 47% to £2.72bn.

Germany ready to spend ‘billions and billions’ fighting recession

The German finance minister has said his government stands ready to spend “many, many billions of euros” fighting a recession.

Olaf Scholz said on Tuesday Germany would see a significant stimulus if a recession breaks out in Europe’s biggest economy or across the continent.

It comes after figures showed an unexpected decline in industrial output in the third quarter as Germany industry suffered from the global trade slowdown and US-China spat.

Figures last week showed production by industry in Europe’s biggest economy dipped by 0.6% in July as capital goods output fell, according to official figures from Germany’s statistics office.

The German chancellor Angela Merkel called for a resolution to the trade spat on a visit to Beijing on Friday, and the figures added to pressure on the ECB to fulfil its heavy hints it will resume bond buying and lower rates.

UK recession fears fade as employment at record high

The pound ticked upwards after figures showed UK unemployment falling to its joint-lowest level since the mid-1970s, despite some analysts’ fears of a recession as Britain edges towards Brexit.

The number of people unemployed and looking for work fell by 0.1 percentage points to 3.8% between May and July, according to the latest figures from the Office for National Statistics.

Britain’s workers also received their biggest average pay rise in more than 11 years, up 4% in the three months to July compared with a year earlier in its biggest rise since mid-2008.

European markets down, Asian markets mixed

European markets opened lower on Friday, with the FTSE 100 (^FTSE) down 0.3%, FTSE 250 (^FTMC) down 0.1% and Euronext 100 (^N100) down 0.6%.

France’s CAC 40 (^FCHI) was down 0.5%, and the German DAX (^GDAXI) was down 0.1%.

Overnight in Asia, Japan’s Nikkei (^N225) was up 0.4%, and China’s Shanghai Composite index (000001.SS) was down 0.1%, while the Hong Kong Hang Seng Index (^HSI) was flat.

What to expect in the US

US stocks also looked set for a lower open. Nasdaq futures (NQ=F) was down 0.4%, S&P500 futures (ES=F) fell 0.3% and Dow Jones futures (YM=F) was 0.3%.