14th Oct 2024 07:52
(Alliance News) - Stocks were called to open lower in London on Monday, after data from China showed that demand remains fragile in the world's number two economy.
Meanwhile, in early corporate news, Mulberry Group said the firm would consider its "position" in light of a raised offer from Frasers Group, though majority owner Challice still has no interest in selling its shares.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called down 11.7 points, or 0.2%, at 8,243.60
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Hang Seng: down 0.5% at 21,139.28
S&P/ASX 200: closed up 0.5% at 8,252.80
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DJIA: closed up 409.74 points, 1.0%, at 42,863.86
S&P 500: closed up 0.6% at 5,815.03
Nasdaq Composite: closed up 0.3% at 18,342.94
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EUR: down at USD1.0929 (USD1.0942)
GBP: down at USD1.3068 (USD1.3074)
USD: up at JPY149.18 (JPY149.13)
Gold: up at USD2,663.10 per ounce (USD2,658.30)
(Brent): down at USD77.87 a barrel (USD78.67)
(changes since previous London equities close)
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ECONOMICS
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Monday's key economic events still to come:
1145 CEST Germany Deutsche Bundesbank President Joachim Nagel speaks
0830 CEST Switzerland export and import prices
0930 BST UK Bank of England Monetary Policy Committee member Swati Dhingra speaks
1100 EDT US consumer inflation expectations
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China said it would issue special bonds to help its sputtering economy, signalling a spending spree to bolster banks, shore up the property market and ease local government debt as part of one of its biggest support packages in years. The plan is part of a series of actions undertaken by Beijing to draw a line under a years-long property sector crisis and chronically low consumption that has plagued the world's second biggest economy. China is also preparing to allow local governments to borrow more to fund the acquisition of unused land for development. Officials have been battling to reverse China's slowdown and achieve a growth target of 5% this year – enviable for many Western countries but a far cry from the double-digit expansion that for years boosted the Asian nation.
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China's consumer inflation rate slowed in September, official data showed, in a sign that demand remains fragile in the world's number two economy. The consumer price index, a key measure of inflation, rose 0.4% year-on-year in September, cooling from the 0.6% climb recorded in August, the National Bureau of Statistics said. The figure came in below the 0.6% forecast in a Bloomberg survey of economists. August's figure, the highest level since February, had raised hopes that consumer confidence may be picking up. At the end of 2023, the country had sank into deflation for four months, with the sharpest contraction in consumer prices in 14 years in January.
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The UK government had to "have a conversation" with DP World to secure its investment after a row over the transport secretary's call to boycott P&O Ferries. Business Secretary Jonathan Reynolds said the investment, which was reportedly put in jeopardy by scathing criticism of the ferry operator, was going ahead. Dubai-based DP World, which owns P&O, also said it is attending an investment summit after getting "the clarity we need" from the government. Reynolds was asked on Sunday Morning With Trevor Phillips how close the government came to losing DP World's planned GBP1 billion investment. "We've had to have a conversation following some of the press reports," he said.
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The UK budget will focus on boosting living standards, reviving the NHS and "rebuilding Britain", Prime Minister Keir Starmer said as he signalled investment in schools, housing and transport. Chancellor Rachel Reeves will deliver her first budget on October 30 following gloomy warnings about the tough decisions and tax rises needed to deal with the economic legacy left by the Tories. But Starmer indicated that the focus of the financial statement will be on "making people better off". The prime minister said his three priorities were "driving up living standards – making sure people feel better off, making sure our NHS is back on its feet and fit for the future, and that we're rebuilding the country, particularly what we're doing on housing".
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The Social Democratic Party of German Chancellor Olaf Scholz plans to lower taxes for a majority of the population if re-elected in next year's federal elections, according to a draft resolution to be adopted. In return, the top 1% of incomes are to be taxed more heavily. "This reform will give people more financial leeway and strengthen purchasing power. We are thereby stimulating the economy from the bottom up and from the middle of society," says the draft prepared for Sunday's SPD executive committee meeting, seen by dpa. The German economy - Europe's largest - is struggling to cope with the fallout of the Ukraine war, trade tensions with China and high energy costs, while burdened by red tape and creaking infrastructure. Revised government predictions forecast a recession for 2024.
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The European Central Bank is expected to lower interest rates again this week as anxiety about inflation in the eurozone fades and concerns over sluggish growth mount. Inflation fell to 1.8% across the 20 members of the euro area in September, the first time it has been below the ECB's target of two percent since 2021. While the rate is expected to tick up again towards the end of the year, the sense that consumer prices are back under control has grown. "Victory against inflation is in sight," French central bank governor Francois Villeroy de Galhau, who sits on the ECB's rate-setting governing council, said last week. "A cut is very likely," he told Franceinfo radio, adding that "it will not be the last". ECB policymakers will meet in Slovenia Thursday to decide whether to reduce rates further and up the tempo of cuts. The central bank is headquartered in Frankfurt but sometimes holds monetary policy meetings in other parts of the eurozone.
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BROKER RATING CHANGES
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Citigroup cuts Compass Group to 'neutral' (buy) - price target 2,650 pence
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Peel Hunt raises Spirax to 'buy' (hold) - price target 8,300 pence
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UBS cuts Victrex price target to 850 (1,000) pence - 'sell'
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COMPANIES - FTSE 100
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Mulberry Group said the firm would consider its "position" in light of a raised offer from Frasers Group, though majority owner Challice still has no interest in selling its shares. Mulberry will make another announcement on Frasers offer "in due course". This follows an improved offer from Frasers, which owns 37% of Mulberry Group, following Mulberry's rejection of a previous approach last week. On Friday after the London market close, Frasers revealed a revised bid of 150 pence per share, higher than the 130p offer made before. The initial offer was rejected by Mulberry with the support of 56.4% shareholder Challice, and Challice on Sunday said it doesn't support the latest offer either. The revised offer is the latest chapter in a tussle between retailer Frasers and the Bath-based fashion group, after struggling Mulberry launched an equity raise last week, of which Frasers said it wasn't given enough notice.
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easyJet named Jan De Raeymaeker as chief financial officer, with effect from January 20, 2025, replacing Kenton Jarvis who as previously announced will succeed Johan Lundgren as chief executive on January 1. Jan De Raeymaeker is currently CFO of Lineas, a private rail freight operator in Europe, where he oversees the Finance, Legal and Purchasing teams. Prior to Lineas, he was CFO of Brussels Airlines. Chief Executive Designate Kenton Jarvis said: "I am delighted that Jan will be joining easyJet in January 2025. Jan brings with him a deep knowledge of the transport and airline sector, which we believe will be of significant benefit to easyJet going forward, and his financial and commercial acumen will be critical as we continue to build towards the delivery of our medium term targets and our purpose of making low cost travel easy. I look forward to working closely with him."
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COMPANIES - FTSE 250
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TI Fluid Systems is "minded to recommend" a 200 pence per share all-cash acquisition proposal from ABC Technologies, following four other proposals from the same firm of 165p, 176p, 188p, and 195p. In order to allow ABC Technologies to conclude due diligence, finalise financing and for the negotiation of definitive transaction documentation, ABC Technologies has requested, and the board of TI Fluid Systems have consented to, an extension of the "Put Up or Shut Up" deadline to November 8. There is no certainty that a firm offer will be made for TI Fluid Systems by ABC Technologies.
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OTHER COMPANIES
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Atalaya Mining reports ore mined in the third quarter of 4.2 million tonnes, compared to 3.8 million tonnes a year prior, and 3.8 million tonnes in the second quarter. The plant processed ore of 4.3 million tonnes in the third quarter from 3.9 million tonnes the previous year, and compared with 4.1 million tonnes in the second quarter. This represents "strong plant performance above nameplate capacity of 15 million tonnes per annum", Atalaya said. Copper grade was 0.32%, from 0.38% the year before, and compared with 0.33% in the second quarter as a result of pit sequencing.
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By Holly Beveridge, Alliance News senior reporter
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