3rd Oct 2024 08:21
(Alliance News) - The FTSE 100 was called to open higher on Thursday morning, in a sudden reversal of sentiment as market participants wait for UK, US and other regions' composite purchasing managers' index data.
The index was previously called to open down 0.1%.
"The geopolitical situation in the Middle East gets tenser, and the Federal Reserve doves get worried with the sight of better-than-expected jolts and ADP report announced earlier in the week," Swissquote's Ipek Ozkardeskaya commented.
"Yesterday's ADP report showed that the US economy added around 142,000 new private jobs last month, comfortably higher than the 124,000 pencilled in by analysts...but we are not seeing the kind of numbers that would keep the expectation of another jumbo rate cut from the Fed in November either."
On commodities, Ozkardeskaya said: "Oil prices rose yesterday as Israel promised to retaliate against Iran and the G7 leaders announced that they are preparing to impose fresh sanctions on Iran...some bullish voices are emerging, putting the USD100 per barrel target back on the table.
"But I believe that we will hardly see the barrel of US crude go past the USD88-90pb range in case of badly deteriorating situation in the Middle East, because OPEC is preparing to call the end of its production restrictions by the end of the year as Saudi is moving toward a strategy where it will try to increase its market share rather than supporting oil prices."
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: opened up 0.2% at 8,304.83
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Hang Seng: down 1.4% at 22,133.35
Nikkei 225: closed up 2.0% at 38,552.06
S&P/ASX 200: closed up 0.1% at 8,205.20
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DJIA: closed up 39.55 points, 0.1%, at 42,196.52
S&P 500: closed up 0.79 points at 5,709.54
Nasdaq Composite: closed up 14.76 points, 0.1%, at 17,925.12
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EUR: down at USD1.1032 (USD1.1046)
GBP: down at USD1.3167 (USD1.3271)
USD: up at JPY146.60 (JPY146.06)
Gold: up at USD2,655.30 per ounce (USD2,650.17)
(Brent): up at USD74.86 a barrel (USD74.05)
(changes since previous London equities close)
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ECONOMICS
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Thursday's key economic events still to come:
China National Day. Financial markets in Shanghai closed. Hong Kong open.
14:30 BST Canada composite PMI
09:00 BST eurozone composite PMI
10:00 BST eurozone PPI
08:50 BST France composite PMI
08:55 BST Germany composite PMI
08:45 BST Italy composite PMI
09:30 BST UK composite PMI
13:30 BST US initial jobless claims
14:45 BST US composite PMI
15:00 BST US factory orders
15:00 BST US ISM services PMI
15:30 BST US EIA natural gas stocks
15:00 BST US total vehicle sales
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Japan's service economy continued to grow in September albeit at a slower pace than in August, survey results published by S&P Global showed. The au Jibun Bank services purchasing managers' index edged down to 53.1 points in September from 53.7 in August. It was worse than the flash estimate published last week, which had shown the index improving to 53.9 in September. Falling closer to the neutral 50-point mark separating growth from contraction, it indicates growth decelerated. The au Jibun Bank composite PMI output index came down to 52.0 points in September from 52.9 in August. The final reading was short of the flash estimate of 52.5. S&P Global said higher order books were driven by the service sector, while manufacturers indicated a modest fall in new work.
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The service sector continued to carry the broader Irish economy last month, as the manufacturing sector continued to shrink, purchasing managers' index survey results from S&P Global showed. The AIB Ireland services business activity index rose to 55.7 points in September from 53.8 in August, representing the second fastest pace of expansion in 14 months after March's 56.6-point reading. However, the composite PMI output index fell to 52.1 points last month from 52.6 in August, showing overall private sector growth was held back by the factory sector. Reported on Tuesday, the manufacturing PMI fell into contraction at 49.4 points in September from 50.4 in August.
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The Bank of England is monitoring the Middle East crisis amid fears that a worsening conflict between Iran and Israel will make it impossible to stabilise oil prices, the Guardian reports. Governor Andrew Bailey told the outlet that he was watching developments "extremely closely" and that there were limits to what could be done to prevent the cost of crude rising if things "got really bad". In a wide-ranging interview with the Guardian, Bailey held out the prospect of the bank becoming a "bit more aggressive" in cutting interest rates provided the news on inflation continued to be good. Bailey also said the economy has proved more resilient than he feared two years ago, or even a year ago. "I think the economy has come through the shocks of the last five years better than many of us feared. So there's a base there to develop."
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BROKER RATING CHANGES
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Citigroup cuts National Grid to 'neutral' (buy) - price target 1,050 (985) pence
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Morgan Stanley cuts British American Tobacco to 'underweight' (overweight)
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Barclays cuts Old Mutual to 'underweight' (equal weight) - price target 62 (67) pence
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COMPANIES - FTSE 100
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Supermarket group Tesco, Britain's biggest retailer, reported that its net profit gained in its first half as cost pressures eased for consumers and companies. Pretax profit jumped 20% to GBP1.1 billion in the six months to August 24 from a year earlier with sales rising as inflation cooled, Tesco said in a statement. The firm also lifted its interim dividend 10% to 4.25p from 3.85p. Revenue rose 3.1% to GBP35.18 billion excluding VAT, and like-for-like sales rose 2.9%. Looking ahead, the firm is guiding for full-year retail adjusted operating profit of GBP2.9 billion, up from "at least GBP2.8 billion" previously.
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COMPANIES - FTSE 250
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SSP in a pre-close trading update said its fourth-quarter revenue increased 15% at constant currency annually, while like-for-like sales increased 6%. For its full year ended September 30, SSP estimates that revenue increased 17% annually to GBP3.5 billion, with operating profit rising approximately 30% to between GBP210 million and GBP220 million. "Good underlying trading momentum has continued through to the end of the financial year, leaving SSP well-positioned to deliver full year results within our previously published planning assumptions," the firm commented.
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OTHER COMPANIES
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Following a strategic review, nanomaterials manufacturer Nanoco said it has appointed CDX Advisors LLC as its financial adviser to with a view to achieving the best possible financial outcome and to secure the long term future of the group's IP and operations. Nanoco insisted however that its considerable financial resources mean that the trading business will continue to be supported to grow and not compromise its potential. The firm said it intends to return surplus cash to shareholders during financial 2025, starting after the publication of its results for the year ended July 31. Moreover Nanoco said it is taking steps to "rationalise" its cost base, with non-executive directors set to agree to defer payment of at least 50% of their director fees until the earlier of the end of the financial year or a potential sale of the trading business, with the accrued liability being satisfied at such time by ordinary shares of 10.0 pence each.
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By Emma Curzon, Alliance News reporter
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