London’s domestically focused FTSE 250 index rose on Wednesday, supported by a sharp rally in real estate stocks after Segro rejected a $16.6 billion takeover approach from US-based Prologis.
The midcap FTSE 250 edged up 0.1% by 0755 GMT, while the blue-chip FTSE 100 was flat.
Real estate shares led the gains.
The FTSE 350 real estate investment trusts index jumped 6%, while the broader real estate sector rose 5.3%.
Harworth and Tritax both gained 5.6% during the session.
Segro jumps after rejecting Prologis offer
Segro was the top performer on the FTSE 100, rising 15.6% after rejecting Prologis’ bid.
The move lifted sentiment across the property sector and helped push the midcap index higher.
Prologis urged Segro shareholders to press the UK landlord’s board to engage with the US logistics firm. Prologis also argued that Segro was undervalued.
The market reaction to the rejected offer was immediate, with investors driving Segro shares sharply higher and extending gains across listed real estate names.
Property stocks lift the broader market
The strength in property shares stood out in an otherwise muted market.
Harworth and Tritax were among the notable gainers in the sector, both rising 5.6%.
The move reflected wider investor interest in real estate stocks following the developments around Segro.
UK politics and rate expectations remain in focus
Beyond the corporate activity, investors were also watching domestic political developments.
The local politics remained in focus after Prime Minister Keir Starmer’s resignation earlier this week paved the way for a leadership contest, which could potentially result in former Greater Manchester mayor Andy Burnham taking the role in July or September.
On the other side, traders were also assessing the outlook for UK interest rates.
LSEG-compiled data showed that markets were anticipating the Bank of England to raise borrowing costs by at least 25 basis points before the end of the year.
The move would be aimed at tackling inflation pressures following the Middle East conflict.
At the same time, some policymakers have signalled a different approach.
UK business activity weakens further
Fresh economic data pointed to slowing momentum in the UK economy.
Britain’s private sector contracted for a second consecutive month in June, according to the latest flash purchasing managers’ index from S&P Global.
The UK composite PMI slipped to 49.4 in June from 49.7 in May.
The reading marked a 14-month low.
Any reading below 50 indicates a contraction in business activity.
The survey added to concerns that the UK economy may have stalled during the second quarter of 2026 after a strong start to the year.
Britain had recorded the fastest growth among Group of Seven economies in the first quarter, but the latest figures suggested that momentum was fading.
Liontrust, Berkeley, and PHP gain
Several individual stocks also posted strong gains outside the real estate rally.
Liontrust climbed 12.2% after the British fund manager said net outflows in the current quarter had slowed.
The company also said it was expanding globally and seeing higher inflows from institutional clients.
Homebuilder Berkeley rose 5.1% after announcing a strong demand outlook, adding to positive sentiment in the housing and property space.
Primary Health Properties gained 3% after saying it was in advanced discussions with an unnamed investor over a new joint venture.
The proposed venture would involve the healthcare REIT’s private hospital assets.
Midcaps outperform in subdued session
Overall, the trading session was defined by a split performance between the UK’s two main equity benchmarks.
The FTSE 100 was little changed, but the FTSE 250 managed a modest rise as takeover interest in Segro triggered a broader rally in real estate shares.
That strength in property names, combined with gains in Liontrust, Berkeley, and Primary Health Properties, helped offset the cautious mood elsewhere in the market as investors weighed the outlook for UK politics, inflation, and interest rates.
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