30th Sep 2024 08:05
(Alliance News) - Stocks were lower in London on Monday morning, following data which showed that the UK's economic growth in the second quarter was weaker than expected.
In early corporate news, Vodafone said that shareholder approval will no longer be required for its UK merger, while Applied Nutrition is considering a listing on the London Stock Exchange.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: opened 0.2% lower, at 8,305.90
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Hang Seng: up 3.3% at 21,311.31
Nikkei 225: down 4.8% at 37,919.55
S&P/ASX 200: closed up 0.7% at 8,269.80
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DJIA: closed up 137.89 points, 0.3% at 42,313.00
S&P 500: closed down 0.1% at 5,738.17
Nasdaq Composite: closed down 0.4% at 18,119.59
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EUR: down at USD1.1164 (USD1.1166)
GBP: down at USD1.3387 (USD1.3399)
USD: down at JPY141.80 (JPY142.81)
Gold: up at USD2,658.00 per ounce (USD2,653.93)
(Brent): up at USD72.39 a barrel (USD71.20)
(changes since previous London equities close)
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ECONOMICS
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Monday's key economic events still to come:
14:00 CEST Germany CPI
11:00 IST Ireland retail sales
11:00 IST Ireland CPI
10:00 CEST Spain current account
09:30 BST UK money supply
21:10 BST UK Bank of England MPC member Megan Greene speaks
08:50 EST US Federal Reserve Governor Michelle Bowman speaks
09:45 EDT US Chicago PMI
10:30 EDT US Dallas Fed manufacturing index
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The UK's economic growth was weaker than initially anticipated, data published by the Office for National Statistics showed Monday. UK's gross domestic product expanded by 0.5% in the second quarter compared to the first, slower than the ONS's first estimate of 0.6%. This also was slower than 0.7% in the first quarter. Year-on-year, UK's GDP increased by 0.7% in the second quarter, weaker than the FXStreet-cited market consensus, which had anticipated annual economic growth of 0.9%.
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Three Chinese megacities on Monday eased restrictions on buying homes and Beijing's central bank said it would ask financial institutions to lower mortgage rates, as the country seeks to pull itself out of a housing slump. The measures are the latest in a raft of pledges out of Beijing since last week aimed at kickstarting the world's number-two economy. The teetering property sector has long accounted for around a quarter of gross domestic product and experienced dazzling growth for two decades. But a years-long housing slump has become a major impediment to growth as the country's leadership eyes a target of around five percent this year – an objective analysts say is optimistic given the many headwinds the economy faces. Late on Sunday, three of the country's biggest cities said they would make it easier for people to buy homes in measures that would come into effect on September 30. The southern megacities of Guangzhou and Shenzhen – home to a combined 37 million people – said homebuyers would no longer be vetted for their eligibility to purchase a home.
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Israel said Sunday it killed another senior Hezbollah official in an air strike after dealing the Iran-backed group a seismic blow by assassinating its leader, Hassan Nasrallah. Israel announced the killing of Nabil Qaouq, a member of Hezbollah's central council in a strike Saturday, adding that its air force has continued to hit "dozens" more targets around Lebanon. Israeli strikes have in recent months decimated Hezbollah's senior command structure, with Nasrallah's right-hand man Fuad Shukr, head of the elite Radwan Force Ibrahim Aqil, and others among the dead. The past week's waves of strikes on Hezbollah strongholds around Lebanon have also plunged the tiny Mediterranean country and the wider region into fear of even more violence to come. Hezbollah launched low-intensity cross-border strikes on Israeli troops after its Palestinian ally Hamas staged its unprecedented attack on Israel on October 7, sparking the war in the Gaza Strip. Nearly a year later, Israel announced a shift in its focus to battling Hezbollah on its northern front. Hezbollah confirmed Nasrallah's killing in a massive strike on Friday on the group's main bastion in south Beirut.
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The EU plans to hold a vote on Friday on whether to impose tariffs on imported electric vehicles made in China, Bloomberg reported Saturday. The tariffs could be as high as 45%, with member states having received a draft of the regulation for the proposed measures, people familiar with the matter said. The vote would follow findings by the European Commission that China unfairly subsidises its EV industry, with tariffs needed not to disadvantage European manufacturers. China denies any unfair activity and has threatened retaliatory tariffs on products such as dairy and pork. EU member states such as Germany and Spain have warned against implementing the tariffs, noting it could trigger a trade war. The new duties on electric vehicles imported from China could be as high as about 35%, on top of the existing 10% rate.
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US Secretary of State Antony Blinken on Friday questioned China's sincerity in seeking peace in Ukraine as he directly pressed his counterpart over exports that boost Russia's military. Blinken met Chinese Foreign Minister Wang Yi on the sidelines of the UN General Assembly, the latest talks as the two powers look to dial down once-soaring tensions. While crediting the diplomacy with bringing progress, Blinken warned that the US would not back down on concerns over China's exports to Russia and made clear that Washington could impose more sanctions. Blinken said that China is fueling the "war machine" of Russian President Vladimir Putin. "When Beijing says that, on the one hand, that it wants peace, it wants to see an end to the conflict, but on the other hand is allowing its companies to take actions that are actually helping Putin continue the aggression, that doesn't add up," Blinken told a news conference.
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Chinese naval and air forces conducted patrols around a flashpoint reef in the South China Sea on Saturday, after a slew of tense encounters with the Philippines in the disputed waterway in recent months. The patrols coincided with joint exercises carried out by the US, Australia, Japan, New Zealand and the Philippines in Manila's exclusive economic zone and within the South China Sea. Beijing claims almost the entire South China Sea despite the rival claims of several Southeast Asian countries, the Philippines among them, and an international ruling that its assertion has no legal basis. Its claims include the waters around Scarborough Shoal – which Beijing seized from Manila in 2012 – where the Chinese military's Southern Theater Command said Saturday it held air and sea patrols.
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BROKER RATING CHANGES
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Barclays cuts Sage Group price target to 970 (985) pence - 'underweight'
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Berenberg raises Cranswick price target to 5674 (5312) pence - 'buy'
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Goldman Sachs raises Ceres Power price target to 261 (243) pence - 'buy'
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COMPANIES - FTSE 100
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Vodafone on Monday said that shareholder approval will no longer be required for its merger of Vodafone UK and Three UK, as the move now classifies as a "significant transaction" under new UK rules. According to the deal, Vodafone will own 51% of the merged UK business, while CK Hutchison will own 49%. The merged business will be consolidated in Vodafone financial statements, it explained, with initial debt financing provided. The UK merger is however still subject to regulatory approval, and approval from CK Hutchison shareholders. Additionally, Vodafone's Italy business sale does not need shareholder approval either under new UK rules. The Italy business sale is expected to have a broadly neutral impact on net assets.
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COMPANIES - FTSE 250
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QinetiQ Group has signed an agreement for the sale of its 407 acre freehold site at Cody Technology Park, Farnborough, to a fund managed by Tristan Capital Partners for GBP112 million. QinetiQ occupies approximately a third of the space at CTP with the remaining two thirds occupied by 96 other tenants, vacant, or used as common areas. Prior to this transaction, QinetiQ was responsible for the investment and maintenance of the whole site.
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OTHER COMPANIES
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Applied Nutrition, a sports nutrition, health and wellness brand, is considering an initial public offering, and intends to publish on Monday a registration document. The company is considering applying for admission of its ordinary shares to the equity shares category of the official list of the FCA and to trading on the main market of London Stock Exchange. Chief Executive Officer Thomas Ryder said: "We are only scratching the surface of our growth opportunity, and this IPO positions us ideally for the next step of our development. With an exciting new product roadmap and opportunities to grow with new and existing customers, we are confident it will enable us to build the world's most trusted and innovative sports nutrition, health & wellness brand." In 2021, JD Sports Fashion acquired a 32% stake in Applied Nutrition.
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By Holly Beveridge, Alliance News reporter
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