Daily market update: housebuilders, oil stocks, Warner Bros, MetaX, Bunzl

A lower-than-expected reading of inflation has reinforced expectations for a Bank of England rate cut tomorrow and helped the FTSE 100 to post solid gains on Wednesday morning.

The inflation data saw a drop in sterling which helps flatter the dominant overseas earnings in the UK’s flagship index.

Housebuilders posted solid gains on the implied implications for rates, which should help support demand if mortgages become more affordable.

BP and Shell recovered some ground as oil prices steadied following a sell-off yesterday on rising hopes for a resolution to the conflict in Ukraine and the implications that might have for global energy markets. There was also strength among mining and financial stocks.

Warner Bros

The takeover battle for Warner Bros is showing no signs of reaching a resolution. Reports suggest the target will reject Paramount’s latest bid amid concerns about how it would be financed.

Paramount has offered $30 cash per share versus Netflix’s deal which is structured on a per share basis as $23.25 in cash and $4.50 in stock. Importantly, Paramount is offering to buy the whole company, whereas Netflix only wants the studio business, library assets, streaming operations and premium programming of HBO. That means this is not a simple situation of highest price wins as the bids are different in structure.

Traditionally in a takeover situation, a target’s board of directors would only recommend a bid if it were in the best interests of investors. Any doubts over the stability of the financing agreement, if there are political issues to consider or if regulators might have any objections, can give the board reason to think twice.

It’s possible that the Warner Bros drama will carry on into the new year, and markets are going to be munching on the popcorn waiting to see how it ends.

MetaX Integrated Circuits

One of the big stories of 2025 is the rise of Chinese technology to rival the West. DeepSeek took the market by surprise earlier in the year as a cheaper alternative to ChatGPT, causing the world to sit up and wonder what else China might produce.

Restrictions on the country accessing advanced Western technology, such as certain chips from Nvidia, have spurred China into becoming more self-sufficient and that’s driven investor curiosity around the available opportunities. Therefore, the stock market flotation of a Chinese GPU maker was prime territory to attract interest.

MetaX’s shares went through the roof on its first day of trading, rising 692%. That’s the kind of returns you might expect from a stock in five to 10 years, not one day. Such a performance will stoke discussion around whether there is an AI bubble.

Bunzl

Bunzl shares fell as investors reacted to an indifferent outlook for the specialist distribution business.

Bunzl provides businesses with items like coffee cups or cleaning products which are not sold to customers but are essential to their day-to-day operations and it has historically delivered steady returns.

However, it has endured a difficult year – the shares falling nearly 40% – and the market appears frustrated that it will take a bit of time for the business to regain its erstwhile reliability.

Serco

Outsourcer Serco has sparked enthusiasm with its latest update, with awards in the defence sector helping to power better-than-expected profit in 2025 and a robust outlook for 2026.

Crucially, for a company in a sector where there have historically been high-profile issues around debt, cash flow looks healthy, and this is supporting a strong balance sheet.