25th Sep 2024 07:48
(Alliance News) - The FTSE 100 was called to open lower on Wednesday morning, with European traders' eyes on French unemployment data and Spanish producer price inflation.
China's central bank on Wednesday said it would slash another key interest rate, a day after it unveiled a 'bazooka' of new measures aimed at boosting its ailing economy.
The medium-term lending facility – the interest for one-year loans to financial institutions – was cut from 2.3% to 2.0%, the People's Bank of China said in a statement on its website.
US consumer confidence unexpectedly dropped in September on labour market concerns, signalling dampening optimism about the economy as November's presidential election approaches. However, stocks in New York closed higher regardless.
"In summary," Swissquote analyst Ipek Ozkardeskaya commented, "investors sentiment is far better than your average consumer's, and the fact that consumer sentiment is weak contributes to inflating the doveish Federal Reserve expectations.
"Swap markets now price in more than 75bp cut from the Fed for the remainder of this year and activity on Fed funds futures assesses more probability to another 50bp cut in November (58%) than a 25bp cut."
Elsewhere, Japan's annual services sector producer price inflation remain unchanged in August from July, the index rising 2.7%.
Australia's annual consumer price inflation rate, meanwhile, eased significantly to 2.7% in August from 3.5% in July. This was a sharper deceleration than the FXStreet-cited market consensus, which had pencilled in 2.8%.
In company news, REA said it was "frustrated" by Rightmove's repeated refusals of its takeover approaches, while NB Private Equity maintained its interim dividend.
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 44.2 points, 0.5%, at 8,238.56
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Hang Seng: up 0.9% at 19,175.21
Nikkei 225: closed down 0.2% at 37,870.26
S&P/ASX 200: closed down 0.2% at 8,122.70
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DJIA: closed up 83.57 points, 0.2% at 42,208.22
S&P 500: closed up 0.3% to 5.732.93
Nasdaq Composite: closed up 0.6% at 18,074.52
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EUR: up at USD1.1188 (USD1.1147)
GBP: up at USD1.3395 (USD1.3378)
USD: down at JPY143.45 (JPY143.67)
Gold: up at USD2,655.68 per ounce (USD2,646.07)
(Brent): up at USD74.90 a barrel (USD74.85)
(changes since previous London equities close)
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ECONOMICS
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Wednesday's key economic events still to come:
11:00 BST France unemployment
11:00 BST France total jobseekers
08:00 BST Spain PPI
15:00 BST UK Bank of England MPC member Megan Greene speaks
13:30 BST US building permits
14:00 BST US new home sales
17:30 BST US EIA crude oil stocks
22:00 BST US Federal Reserve Governor Adriana Kugler speaks
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Keir Starmer has said Benjamin Netanyahu's criticism of the UK government's decision to suspend some arms export licences to Israel, amid concerns they could be used in violation of international humanitarian law, is wrong. The prime minister rejected his Israeli counterpart's accusation that the move had been "misguided", in comments that are likely to anger Tel Aviv. He described Israel as a "very important ally" and said he had "long respected and supported its right to self-defence" but said Britain had to comply with international rules. Asked whether he agreed with Netanyahu's intervention, Starmer told LBC: "No, he's not right about that and we have to comply with international law and our own domestic law in relation to that." The new Labour government has suspended about 30 out of a total of 350 arms export licences to Israel, after a UK assessment suggested they could be used to breach international rules.
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Annual services sector producer price inflation in Japan remain unchanged in August from July, data from the Bank of Japan showed on Wednesday. The services producer price index rose 2.7% in August from a year before, the same pace of annual increase as seen in July, though slower than the 3.1% increase in June. The pace of inflation in July was revised down from the preliminary estimate of 2.8%. On a monthly basis the PPI rose 0.1% in August from July, slowing from an unrevised increase of 0.3% in July from June. In both May and June, producer prices had remained entirely flat on the month before. A previous revision of June showing a 0.1% increase in prices on month was revised again to flat.
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China test-fired an intercontinental ballistic missile (ICBM) into the Pacific Ocean on Wednesday. The ICBM carried a dummy warhead and fell into a designated area of the sea, the Defence Ministry said in a statement. The launch by the People's Liberation Army was part of routine annual training. It added the launch complied with international law and was not directed against any country or target. It is unclear how often China conducts tests over such a distance. In 1980, China launched an ICBM into the South Pacific. A map published in Chinese newspapers at the time showed the target area as roughly a circle in the centre of a ring formed by the Solomon Islands, Nauru, the Gilbert Islands, Tuvalu, western Samoa, Fiji and the New Hebrides. The US and non-governmental organisations have said China has been building up its missile silos, but it is unclear how many missiles and nuclear warheads it has added to its arsenal.
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BROKER RATING CHANGES
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Goldman cuts Diageo price target to 2,400 (2,450) pence - 'sell'
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JPMorgan cuts Burberry price target to 650 (800) pence - 'neutral'
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COMPANIES - FTSE 100
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Rightmove said it received a third unsolicited, non-binding and highly conditional takeover proposal from REA on Sunday. The increased proposal was 341 pence in cash and 0.0422 new REA shares for each Rightmove ordinary share. Based on the closing price of REA on Tuesday, this revised proposal implied an offer value of 759 pence, Rightmove said. The property portal provider said its board "unanimously rejected" the proposal, saying it "continues to be unattractive and materially undervalues the company and its future prospects". REA responded to the rejection, emphasising its frustration and urging Rightmove's shareholders to encourage Rightmove's board to engage with REA. "REA continues to firmly believe that the further improved proposal represents a highly compelling proposition for Rightmove's shareholders at a significant premium to relevant trading metrics, providing a combination of immediate value certainty in cash and at the same time giving Rightmove shareholders the opportunity to benefit from the future value creation of the combined business," REA said.
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LondonMetric has purchased a GBP78.0 million urban logistics portfolio from a FTSE 100 pension fund. The real estate investor said the portfolio generates income of GBP4.8 million per year, with average rent of GBP9.20 per square foot. LondonMetric said it expects portfolio income generation to rise to GBP5.8 million per year, or GBP11.10 per square foot. It also announced the sale of an Edinburgh office property for GBP6.0 million. In response, REA said it is "disappointed" and "frustrated that, save for the rejection of REA's three previously disclosed proposals, REA has still had no substantive engagement with Rightmove".
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COMPANIES - FTSE 250
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NB Private Equity said its net asset value per share decreased to USD27.87 on June 30, from USD28.07 one year prior. The private equity investment company, which is managed by Neuberger Berman Group, kept its first-half dividend unchanged at 47 US cents. It expects "to continue to be active during the second half", and said there is cause for optimism as central banks are starting to cut interest rates.
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OTHER COMPANIES
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Avingtrans announced that for the financial year to May 31, revenue from continuing operations increased by 17% to a record GBP136.6 million from GBP116.4 million the year before. It declared a 2.9p per share final dividend, resulting in a total dividend of 4.7p per share, up from 4.5p. Pretax profit however fell to GBP4.8 million from GBP7.5 million. "We have a strong order book going into FY25, and we anticipate growing as a Group this year thanks to favourable macro conditions in the energy, infrastructure, and healthcare sectors," said Chair Roger McDowell.
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By Emma Curzon, Alliance News reporter
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