FTSE 250: The mid cap index has been barely affected by the recent softness seen in the main FTSE 100 index and remains in a strong bullish medium and short-term trend.

Given that the US markets was closed for the Labour day holiday coupled with the light economic calendar, investors attention turned firmly to the potential acquisition of Cadbury by Kraft. This event alone managed to buoy stock markets as a signal that an increase in acquisition activity demonstrates confidence in the operating environment within which companies are working. An increase in M&A activity is also a classic sign of what you would expect to see in a recovery cycle. More specifically to the confectionary sector, analysts are focusing on this potential acquisition as a move towards an end game of consolidation in this arena. Speculation has increased that Cadbury could see a counter bid by rivals Nestle and Hershey and that Kraft initial offer will be improved; as such, this story is likely to run for sometime.

Today, events are again relatively muted. Economic data of note comes from Germany’s Industrial Production which could again surprise on the upside given the recent strength seen in Germany’s economic data releases. In the UK, we have the BRC retail monitor and RICS housing reports.

Sources: Reuters: BBC: Bloomberg: Lawshare: Deutsche Bank (db): Proquote: Financial Times: Wall Street Journal: CLSA: Sharescope: Market News. Capital Economics: CNBC: Wikipedia:

Please note this report provides a guide to some of the relevant areas that individual investors should consider discussing with an authorised adviser in relation to their specific circumstances, it does not constitute individual advice. As a result no action should be taken or refrained from being taken as a result of its content.