27th Sep 2024 07:59
(Alliance News) - European stocks were called to open higher on Friday, ahead of US personal consumption expenditure and other important US data.
In political news, Japan's ruling party has elected former defence minister Shigeru Ishiba as its leader and the country's next prime minister.
Meanwhile, China kept itself in the spotlight by releasing around USD142.6 billion in liquidity into the financial market, in another bold stimulus measure.
Swissquote's Ipek Ozkardeskaya notes that "the early CPI reads for France and Spain for September are due to be released this morning. The figures are expected to point at a further easing in price pressures. If that's the case, we could see the 1.12 resistance strengthen before the closing bell.
"But the US dollar, and the PCE report will say the last word."
In company news, PureTech Health reported US Food & Drug Administration approval for its schizophrenia drug, and abrdn Property Income Trust agreed to sell a subsidiary for GBP351 million.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called up 0.1% at 8,291.01
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Hang Seng: up 2.7% at 20,454.83
Nikkei 225: closed up 2.3% at 39,829.56
S&P/ASX 200: closed up 0.1% at 8,212.20
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DJIA: closed up 260.36 points, 0.6% at 42,175.11
S&P 500: closed up 0.4% at 5,745.37
Nasdaq Composite: closed up 0.6% at 18,190.29
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EUR: down at USD1.1150 (USD1.1179)
GBP: down at USD1.3384 (USD1.3412)
USD: down at JPY143.56 (JPY144.69)
Gold: down at USD2,664.80 per ounce (USD2,669.65)
(Brent): down at USD71.24 a barrel (USD71.58)
(changes since previous London equities close)
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ECONOMICS
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Friday's key economic events still to come:
08:00 BST Spain GDP
08:00 BST Spain CPI
08:55 BST Germany unemployment
09:00 BST Italy industrial sales
09:15 BST eurozone European Central Bank Governor Philip Lane speaks
10:00 BST eurozone economic sentiment index
10:00 BST eurozone consumer confidence
10:00 BST eurozone industrial sentiment index
10:00 BST Italy PPI
11:00 BST Ireland wholesale prices
12:00 BST Spain business confidence
13:15 BST US Federal Reserve Governor Michelle Bowman speaks
13:30 BST US trade balance
13:30 BST US wholesale inventories
13:30 BST US personal consumption expenditures
15:00 BST US Michigan consumer sentiment index
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China on Friday cut the amount banks must hold in reserve, releasing an estimated USD142.6 billion in liquidity into the financial market as leaders embark on one of their biggest drives in years to kickstart growth. Growth in China is being dragged down by a prolonged debt crisis in the property sector, sluggish domestic consumption and high youth unemployment. The move by the People's Bank of China comes a day after President Xi Jinping and other top officials admitted to "new problems" in the world's second-largest economy and outlined plans to get it back on track. The bank also cut the seven-day reverse repo rate, the short-term interest paid by the central bank on loans from commercial lenders, from 1.7% to 1.5%.
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UK Chancellor Rachel Reeves could be willing to change the plans for Labour's crackdown on non-doms, according to reports. The Financial Times reported that government officials had said Reeves could change the policy if the numbers are not satisfactory. A Treasury spokesperson called the report "speculation, not government policy" and pledged to remove "the outdated non-dom tax regime". It comes after a report in the Guardian suggested Treasury officials fear estimates due to be issued by the Office for Budget Responsibility will forecast that the policy will raise no money because of the risk of people who are super-rich leaving the UK. According to the Guardian report, there are concerns that the OBR forecast would predict the policy could cost the government money due to non-doms limiting their time in the UK.
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Israeli Prime Minister Benjamin Netanyahu said his government had not responded to a US-led push for a 21-day ceasefire in its campaign against Lebanese militant group Hezbollah. "It is an American-French proposal, which the prime minister has not even responded to," said a statement from Netanyahu's office, adding that he had ordered the army "to continue the fighting with full force". In a separate statement, the military said a tank brigade conducted an exercise "a few kilometres from the Lebanese border... in thicketed, mountainous terrain" on Thursday morning.
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The UK and Australia are to begin discussions on a formal treaty between the two countries as part of their own nuclear-powered submarine programme. UK Defence Secretary John Healey said the bilateral agreement would "bind" their alliance into law. They form two-thirds of the security partnership with the US, which was established in 2021. Healey said he hoped it would mean the alliance would "endure for decades". Speaking alongside Australian Deputy Prime Minister Richard Marles and US Secretary of Defense Lloyd Austin, he said the potential treaty "not only reflects our commitment to secure a secure Indo-Pacific region where international rules are respected, it also sends a very strong message that our defence alliance is one that will endure for many decades to come."
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Former defence minister Shigeru Ishiba will be Japan's next prime minister after winning the ruling party vote, according to the official count. Liberal Democratic Party lawmakers and party members had to choose between Ishiba and hawkish Sanae Takaichi – a rare prominent woman in Japanese politics – as the country's next premier. Because the LDP holds a parliamentary majority, Ishiba is certain to become prime minister, and will likely call a snap election to shore up his mandate. He must face down regional security threats, from an increasingly assertive China and its deepening ties with Russia to North Korea's banned missile tests. At home, he will be tasked with breathing life into the economy, as the central bank moves away from decades of monetary easing that has slashed the value of the yen.
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UK Prime Minister Keir Starmer met with Republican presidential candidate Donald Trump during his visit to New York, visiting Trump Tower for talks ahead of November's US election. Starmer said he wanted to meet Trump face to face because "I'm a great believer in personal relationships on the world stage". The meeting has the potential to be diplomatically awkward, not just because of Trump's bombastic style but also because Starmer has not been able to schedule a similar appointment with Democratic candidate and vice president Kamala Harris.
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BROKER RATING CHANGES
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Oddo BHF raises Auto Trader price target to 850 pence - 'neutral'
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Goldman raises Experian price target to 5,200 pence - 'buy'
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Deutsche Bank cuts Future price target to 2,078 (2,120) pence - 'buy'
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COMPANIES - FTSE 250
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Merchants Trust said its net asset value per share rose to 594.6 pence at July 31, from 549.8p one year prior. The total return of its investment portfolio was 13.5% for the first half compared to 12.3% from its benchmark. It declares an interim dividend of 7.1p per share, up from 7.0p. The trust said it is pleasing to see a reduction of political uncertainty in UK, and that it is optimistic about its medium-term outlook for income and capital growth.
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PureTech Health said KarXT has received US Food & Drug Administration approval for treating schizophrenia. It said the milestone triggers payments to it totalling USD29 million under agreements with Royalty Pharma and Karuna Therapeutics, which PureTech sold to Bristol Myers Squibb in March. Bristol Myers Squibb will market KarXT as Cobenfy. It is "the first new drug mechanism approved in over 50 years for the treatment of schizophrenia in adults", PureTech said. Under these agreements, PureTech is also entitled to potential future payments related to additional milestones as well as approximately 2% royalties on net annual sales over USD2 billion.
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OTHER COMPANIES
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abrdn Property Income Trust has entered into an agreement with certain funds and accounts managed by GoldenTree Asset Management, for the sale of the entire share capital of wholly-owned subsidiary abrdn Property Holdings. The transaction comprises the sale of 39 assets, API's entire investment property portfolio with the exception of its Far Ralia interest, for cash consideration of GBP351 million. GoldenTree has paid a deposit of GBP35.1 million, with the balance being payable in cash on completion.
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By Emma Curzon, Alliance News reporter
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