16th Oct 2024 08:05
(Alliance News) - Stocks were higher in London on Wednesday morning, as data showed that UK consumer price inflation fell in September to its lowest rate in more than three years, while producer prices decreased.
In early corporate news, GSK celebrated as the US Food & Drug Administration accepted a new drug application for gepotidacin.
Meanwhile, miner Rio Tinto sealed a roughly USD6.7 billion deal to buy lithium chemicals producer Arcadium, as it expects lithium demand to continue to grow due to the popularity of electric vehicles.
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 56.75 points, or 0.7%, at 8,306.03
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Hang Seng: up 0.3% at 20,371.80
Nikkei 225: closed down 1.8% at 39,180.30
S&P/ASX 200: closed down 0.4% at 8,284.70
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DJIA: closed down 324.80 points, 0.8%, at 42,740.42
S&P 500: closed down 0.8% at 5,815.26
Nasdaq Composite: closed down 1.0% at 18,315.59
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EUR: down at USD1.0879 (USD1.0950)
GBP: down at USD1.2991 (USD1.3094)
USD: down at JPY149.25 (JPY149.29)
Gold: up at USD2,677.00 per ounce (USD2,663.59)
(Brent): up at USD74.20 a barrel (USD73.90)
(changes since previous London equities close)
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ECONOMICS
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Wednesday's key economic events still to come:
08:30 EDT Canada manufacturing sales
20:40 CEST eurozone European Central Bank President Christine Lagarde speaks
08:30 EDT US export and import prices
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The Office for National Statistics reported that annual consumer price index inflation in the UK rose by 1.7% in September, slowed from 2.2% in August. This was short of the 1.9% rise that had been expected by FXStreet-cited market consensus. On a monthly basis, prices were little changed in September, down from a rise of 0.5% in September 2023. Prices rose 0.3% in August, and fell 0.2% in July. CPI including owner occupiers' housing costs, or CPIH, rose 2.6% on-year in September, down from 3.1% in August. On a monthly basis, CPIH rose by 0.1% in September, down from 0.5% in September the year before. Producer prices meanwhile fell 2.3% annually in September, from a revised decrease of 1.0% in August. On a monthly basis, producer input prices fell by 1.0%, accelerated from a 0.3% fall in August.
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Asking rents outside London have hit a new record high of GBP1,344 on average per month, having increased by 5.2% annually, according to a property website. The average rent advertised for London properties also reached a new record of GBP2,694 per month, which was 2.5% higher than a year earlier, Rightmove said. The figures cover the third quarter of 2024 across Britain. Rightmove said the average number of inquiries per rental property is now 15, down from 23 last year, but nearly double the eight recorded in 2019. The supply of homes available to rent has increased annually but is still below 2019 levels, Rightmove said. It added that asking rents on more than a fifth (21%) of properties are being reduced before a tenant is found. This is up from one in six (16%) last year.
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Kamala Harris went after her US presidential election rival Donald Trump's mental state and fitness for office Tuesday after the 78-year-old Republican's televised town hall veered into a surreal, impromptu music session. Three weeks ahead of the US election, Harris's campaign has begun to focus aggressively on Trump's health and mental stability, and was quick to weigh in, saying the ex-president appeared "lost, confused, and frozen on stage." At Monday's event in Oaks near Philadelphia, a pause for two medical emergencies in the crowd turned into a bizarre 39 minutes of music and dancing as Trump abandoned the discussion of the election to put on his favorite hits, swaying awkwardly on stage. "Who the hell wants to hear questions, right?" he said, bringing the Q&A section to an abrupt end and telling his people to crank up the volume. He then stayed on stage for nine songs, ranging from opera to Guns N' Roses and Elvis, with the ex-president alternating his dance moves with standing in place and staring into the crowd. "Hope he's okay," Harris opined dryly on X.
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Iran's top diplomat has warned UN chief Antonio Guterres that Tehran is ready for a "decisive and regretful" response if Israel attacks his country in retaliation for a missile attack, AFP reported. The republic fired about 200 missiles at Israel on October 1 in revenge for the killing of two of its closest allies, Hamas leader Ismail Haniyeh and Hezbollah leader Hassan Nasrallah, as well as an Iranian general. Israeli Defence Minister Yoav Gallant vowed last week that his country's retaliatory measure would be "deadly, precise and surprising". During the call on Tuesday evening, Araghchi also appealed to the United Nations to use its resources "to stop the crimes and aggressions of the Israeli regime and to send humanitarian aid to Lebanon and Gaza".
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German Chancellor Olaf Scholz is set to deliver a government statement in Berlin on Wednesday regarding the summit of EU leaders taking place in Brussels on Thursday and Friday. The statement is expected to address migration, the Russian war against Ukraine, the conflicts in the Middle East and the EU's competitiveness. The statement is expected to last half and hour. A 90-minute session in the German lower house of parliament, or Bundestag, is scheduled for the subsequent debate. Following the debate, Foreign Minister Annalena Baerbock and Health Minister Karl Lauterbach plan to answer questions from members of parliament.
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High-level representatives from the Gulf region meet their EU counterparts on Wednesday in Brussels for the first summit between the two regional organisations. The emir of Qatar, Sheikh Tamim bin Hamad Al Thani, is to host the meeting alongside outgoing European Council President Charles Michel. Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates - which form the Gulf Cooperation Council - have become increasingly important partners for the EU in recent years. Mineral fuel imports from the region to the EU have tripled since 2020, exacerbated by Russia's full-scale invasion of Ukraine and the subsequent drastic change in Europe's energy supply sources. Next to energy, the talks are likely to touch on more contentious topics such as the EU's support for Ukraine and condemnation of Russia's actions, the conflict in the Middle East and visa policy.
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BROKER RATING CHANGES
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Deutsche Bank resumes Informa with 'buy' - target 1,041 pence
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Jefferies raises Balfour Beatty price target to 518 (462) pence - 'buy'
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Barclays cuts THG price target to 84 (92) pence - 'equal weight'
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COMPANIES - FTSE 100
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Anglo-Australian mining firm Rio Tinto cemented a roughly USD6.7 billion deal to buy lithium chemicals producer Arcadium on Wednesday, snapping up a significant player in the red-hot battery sector. The bumper agreement values Arcadium – which was only formed this year – at USD5.85 a share, a premium of almost 40% over the market average. The deal offers Rio Tinto access to many more chemicals needed to create lithium batteries and is a bet that the multi-billion-dollar-a-year electric vehicle market will continue to grow. If regulatory approval is granted, Rio Tinto would become the world's third-largest lithium supplier. But the deal is not without risk. The lithium industry has struggled with oversupply and languishing electric vehicle sales that has pushed lithium prices down and led to mines around the world shutting or scaling back production, at least temporarily. Separately, the miner posted third quarter results, which saw Pilbara iron ore shipments rise 1% year-on-year to 84.5 million tonnes. For 2024, Rio Tinto expects 323 to 338 million tonnes of Pilbara iron ore shipments, up from 331.8 million tonnes in 2023. Rio Tinto says: "Lithium demand continues to grow with electric vehicle sales rising 20% year on year over the first eight months despite slower-than-expected uptake from Europe and the US."
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GSK says that the US Food & Drug Administration has accepted a new drug application for gepotidacin, an investigational, first-in-class oral antibiotic with a novel mechanism of action for the treatment of female adults (and adolescents with uncomplicated urinary tract infections). The FDA has granted priority review for this application and assigned a prescription drug user fee act action date of March 26, 2025.
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COMPANIES - FTSE 250
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Moonpig says it aims to pay a total financial 2025 dividend of GBP10 million, with the first dividend under its new policy to be paid around March. The new policy commits to maintaining "robust dividend cover" of 3x to 4x in the medium term. Also announces a share buyback of up to GBP25 million, expected to start in early November. Looking ahead, says medium term targets remain unchanged, and is still aiming for double digit percentage annual revenue growth.
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OTHER COMPANIES
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Vertu Motors posts interim pretax profit of GBP22.1 million, down from GBP30.1 million a year prior, while revenue inches up to GBP2.49 billion from GBP2.42 billion the year before. Declares a dividend per share of 0.90 pence, versus 0.85p. Looking ahead, says financial 2025 profit remains in line with current market expectations, adding that September's performance delivered profit in line with prior year levels. Nevertheless, cost controls remain a "major focus" on continued pay pressure, but believes it is well positioned to deliver on strategy. Separately, also agrees new GBP3 million share buyback, to be completed by February 28.
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By Holly Beveridge, Alliance News senior reporter
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