24th Sep 2024 07:58
(Alliance News) - The FTSE 100 was called higher on Tuesday morning, ahead of US consumer confidence data and following news that Australia's central bank has resisted any temptation to cut rates.
China on Tuesday unveiled some of its boldest measures in years, boosting morale in markets, as it looks to turbocharge its struggling economy. Among the measures was a cut to the reserve requirement ratio, which dictates the amount of cash banks must hold in reserve.
The move will inject around a CNY1 trillion, around USD141.7 billion, in "long-term liquidity" into the financial market, central bank chief Pan Gongsheng said.
"Good news is that investors reacted positively to the stimulus measures," Swissquote analyst Ipek Ozkardeskaya commented. "Bad news is that the rebound in Chinese assets will likely remain fragile until the stimulus measures lead to concrete amelioration of the economic data."
The Reserve Bank of Australia meanwhile has left its cash rate target at 4.35%, as expected.
Ozkardeskaya added: "There is one central bank that stands out in the middle of a jungle of doves and that’s the Reserve Bank of Australia. The RBA kept its policy rate unchanged for the 7th consecutive meeting today and its governor said that they don't care about what the other central banks do, that they are focused on their domestic economy."
Business activity growth in Japan decelerated in September, the flash composite output index slipping to 52.5 points in September from 52.9 in August and thereby showing a growth deceleration.
In company news, a GSK vaccine received a positive opinion from an EU regulator, and Smiths Group reported increased full-year profit.
Here is what you need to know at the London market open:
----------
MARKETS
----------
FTSE 100: called up 0.6% at 8,309.51
----------
Hang Seng: up 3.6% at 18,905.55
Nikkei 225: closed up 0.6% at 37,940.59
S&P/ASX 200: closed down 0.1% at 8,142.00
----------
DJIA: closed up 61.29 points, 0.2% at 42,124.65
S&P 500: closed up 0.3% to 5,718.57
Nasdaq Composite: closed up 0.1% at 17,974.27
----------
EUR: down at USD1.1108 (USD1.1135)
GBP: down at USD1.3338 (USD1.3357)
USD: up at JPY144.35 (JPY143.77)
Gold: down at USD2,625.97 per ounce (USD2,630.09)
(Brent): up at USD74.64 a barrel (USD73.80)
(changes since previous London equities close)
----------
ECONOMICS
----------
Tuesday's key economic events still to come:
09:00 BST Germany Ifo business climate
13:55 BST US Redbook index
14:00 BST US S&P/Case-Shiller home price index
14:00 BST US house price index
14:00 BST US Federal Reserve Governor Michelle Bowman speaks
15:00 BST US consumer confidence
15:00 BST US Richmond Fed manufacturing index
----------
Britain's governing Labour party sought to strike a more upbeat note about the country's economic future against a backlash at proposed cuts to welfare payments and a row over top ministers receiving gifts. In a keynote speech to the centre-left party's annual conference in Liverpool, which was often interrupted by hecklers, finance minister Rachel Reeves insisted on a need for "iron discipline" on the economy amid ballooning state debt. Reeves, the first woman named Britain's chancellor of the Exchequer, said her first budget next month would open the way for business investment that would provide the country with "lasting growth". She reiterated Labour's pre-election pledge that workers would not face tax increases on their salaries, while paving the way for other tax hikes, according to analysts. Reeves also pledged "no return to austerity" as seen under Conservative rule, a mantra repeated by several Labour figures as the party held its first annual gathering in power since 2009. Casting a shadow over the conference was a row about gifts that dominated the buildup and continued fallout over the controversial axing of a fuel benefit for millions of pensioners, which has triggered anger from unions. The government also suffered a blow near the end of Reeves's speech as news came through that nurses had rejected the government's latest pay deal.
----------
Employer concerns about the UK government's workers' rights package have been "addressed and understood", Reeves said as she sought to reassure businesses about the legislation. The chancellor insisted the government does not want to make it harder for companies to hire temporary workers or students with its employment rights bill as she faced business chiefs during an event at Labour's annual party conference. It came amid a series of discussions with unions and businesses over the details of the party's plans to bolster protections for workers ahead of the draft law's introduction to Parliament, with further meetings expected over the coming weeks. The reforms are set to include a ban on "exploitative" zero-hours contracts and fire and rehire practices. The employment rights bill is also expected to remove restrictions on trade unions, including the Conservative government's law aimed at ensuring a minimum level of service during strikes. Ministers were asked about the balance between employee and employer protections as they faced business leaders at a conference event on Monday afternoon.
----------
BROKER RATING CHANGES
----------
Jefferies cuts BP price target to 540 (590) pence - 'buy'
----------
Jefferies cuts Shell price target to 3,100 (3,200) pence - 'buy'
----------
Morgan Stanley cuts Energean to 'equal weight' - price target 1,100 pence
----------
COMPANIES - FTSE 100
----------
Engineering firm Smiths Group said its pretax profit increased to GBP372 million in the year ended July 31, from GBP360 million the year before. Revenue rose 3.1% to GBP3.13 billion from GBP3.04 billion. Smiths increased its final dividend by 5.2% to 30.2 pence per share, bringing the annual total likewise up 5.2% to 43.75p from 41.6p. It said it expects organic revenue growth within the 4% to 6% medium-term outlook range in the new year, and noted strong demand for John Crane and Smiths Detection, although it expects growth in these divisions to ease. Smiths added: "Good demand in aerospace, alongside the pace of market recovery in US construction, will determine the pace of growth in Flex-Tek, and recovery in semiconductor test alongside growth in aerospace and defence-related programmes underpins our expectation for an improving performance in Smiths Interconnect." The firm also said it has acquired two North American companies, Modular Metal Fabricators Inc and Wattco Inc, for up to GBP110 million in total. It will integrate them into its Heating, Ventilation & Air Conditioning and electrical heating solutions platforms in its Flex-Tek business.
----------
Pharmaceutical company GSK announced a positive opinion from the EU's European Medicine Agency's Committee for Medicinal Products for Human Use, recommending the new single-vial, fully liquid presentation of its invasive meningococcal disease vaccine Menveo. If approved, it will be available for active immunisation of patients from two years of age upwards, offering healthcare providers an option that does not require reconstitution before use.
----------
COMPANIES - FTSE 250
----------
Irn-Bru maker AG Barr said that for the six months ended July 27, revenue increased 5.2% to GBP221.3 million from GBP210.4 million the prior year. Pretax profit however fell 10% to GBP24.9 million from GBP27.8 million. The beverage company increased its first-half interim dividend by 17% to 3.10p per share from 2.65p. It said this performance "was in line with our expectations and we have ambitious plans for H2 and beyond, which are consistent with our long term growth strategy...We are confident that, assuming a reasonably settled external environment, the execution of our plans will result in a strong H2 and the delivery of a full year performance in line with current market expectations".
----------
OTHER COMPANIES
----------
Building materials supplier CRH has appointed Chief Financial Officer Jim Mintern, a board director since June 2021, as its new chief executive officer. He succeeds Albert Manifold, who plans to retire. Manifold will "relinquish his executive responsibilities" on December 31, but remain as an advisor through 2025.
----------
NewRiver REIT and real estate investment trust Capital & Regional have agreed on a recommended cash and share offer, for NewRiver to take over the latter company. Shareholders will be entitled to receive 31.25 pence in cash and 0.41946 new NewRiver shares per C&R share. Capital & Regional shareholders will own approximately 21% of the enlarged company. NewRiver said it has the support of just over 69% of Capital & Regional shareholders, including its largest, Johannesburg-listed Growthpoint Properties. Both NewRiver and Capital & Regional invest in retail assets.
----------
By Emma Curzon, Alliance News reporter
Comments and questions to [email protected]
Copyright 2024 Alliance News Ltd. All Rights Reserved.