1st Oct 2024 08:05
(Alliance News) - Stocks opened higher in London on Tuesday morning, after data showed that UK shop prices have moved further into deflation.
Meanwhile, in early corporate news, James Halstead raised its full-year dividend by 6.3%, marking this the firm's 49th year of dividend increases.
Here is what you need to know at the London market open:
----------
MARKETS
----------
FTSE 100: opened 8.34 points higher, or 0.1%, at 8,245.29
----------
Nikkei 225: closed up 1.9% at 38,651.97
S&P/ASX 200: closed down 0.7% at 8,208.90
Chinese markets are closed for National Day.
----------
DJIA: closed up slightly at 42,330.15
S&P 500: closed up 0.4% to 5,762.48
Nasdaq Composite: closed up 0.4% 18,189.17
----------
EUR: down at USD1.1138 (USD1.1142)
GBP: down at USD1.3372 (USD1.3397)
USD: up at JPY144.44 (JPY143.31)
Gold: up at USD2,644.80 per ounce (USD2,633.76)
(Brent): down at USD71.68 a barrel (USD72.30)
(changes since previous London equities close)
----------
ECONOMICS
----------
Tuesday's key economic events still to come:
10:00 CEST eurozone manufacturing PMI
11:00 CEST eurozone CPI
09:50 CEST France manufacturing PMI
09:55 CEST Germany manufacturing PMI
09:30 BST UK manufacturing PMI
15:00 BST UK Bank of England Chief Economist Huw Pill speaks
08:55 EDT US Redbook index
09:45 EDT US manufacturing PMI
10:00 EDT US ISM manufacturing PMI
10:30 EDT US Dallas Fed service index
----------
The US is set to see inflation cool further towards policymakers' target, Federal Reserve Chair Jerome Powell said, with interest rates likely to come down over time too. "Disinflation has been broad based, and recent data indicate further progress toward a sustained return to two percent," Powell said, according to prepared remarks of a speech he is set to deliver at the National Association for Business Economics annual meeting in Tennessee. "Broader economic conditions also set the table for further disinflation," the Fed chair said. In particular, Powell noted that prices of goods – excluding volatile food and energy categories – have fallen while supply bottlenecks have eased. With the growth rate in rents charged to new tenants remaining low, he added, housing services inflation will likely continue to decline. Meanwhile, the Fed has "made a good deal of progress" when it comes to bringing price increases down without a painful spike in unemployment, he said. He also signalled that further rate cuts are in the pipes, if there are no major surprises. "Looking forward, if the economy evolves broadly as expected, policy will move over time toward a more neutral stance," Powell said.
----------
European Central Bank President Christine Lagarde expressed confidence in Brussels on that inflation could soon return to the bank's target level and did not rule out a further interest rate cut. "Looking ahead, inflation might temporarily increase in the fourth quarter of this year as previous sharp falls in energy prices drop out of the annual rates, but the latest developments strengthen our confidence that inflation will return to target in a timely manner," Lagarde told a European Parliament's economic and monetary affairs committee. "We will take that into account in our next monetary policy meeting in October. The ECB staff projections from September foresee inflation to average 2.5% in 2024, 2.2% in 2025 and 1.9% in 2026," she said. Her comments were seen as the clearest indication yet of a possible cut in October.
----------
UK shop prices moved further into deflation in September, reflecting discounts and fierce competition, a survey showed. According to figures from the British Retail Consortium, shop price deflation was at 0.6% in September, compared with deflation of 0.3% in the previous month. Shop price annual growth was at its lowest rate since August 2021, the BRC said. Non-food remained in deflation at 2.1% in September, further down from 1.5% deflation in the preceding month. Food inflation, however, picked up to 2.3% in September, from 2.0% in August. Fresh Food inflation accelerated in September, to 1.5%, up from 1.0% in August. Ambient Food inflation decelerated to 3.3% in September, down from 3.4% in August. BRC Chief Executive Helen Dickinson said: "September was a good month for bargain hunters as big discounts and fierce competition pushed shop prices further into deflation. Shop price inflation is now at its lowest level in over three years, with monthly prices dropping in seven of the last nine months."
----------
A key quarterly survey of Japanese businesses showed on Tuesday no significant change in confidence levels among the country's biggest manufacturers, while large non-manufacturers were slightly more upbeat. The Bank of Japan's Tankan survey reports the difference between the percentage of firms who see current business conditions as favourable, and those that do not. (A positive figure means more businesses are optimistic.) Tuesday's headline reading among large manufacturers was plus 13, unchanged from three months earlier. It beat market expectations of plus 12 and followed a modest uptick in the previous quarter to 13 from 11. Among large non-manufacturers in the world's fourth-largest economy, the index increased from plus 33 to plus 34. Looking ahead, "we expect that large manufacturers will see a deterioration in business conditions" in the fourth quarter of this year, according to SuMi Trust's Katsutoshi Inadome.
----------
Japan's manufacturing sector continued to be in decline in September, while the country's unemployment rate fell in August, data showed Tuesday. The headline au Jibun Bank manufacturing purchasing managers' index edged down to 49.7 points in September from 49.8 in August, S&P Global reported. Falling a notch further from the neutral 50-point mark separating growth from contraction, it indicates that the decline in overall operating conditions accelerated mildly. The figures came as Japanese government data showed that the country's unemployment rate improved to 2.5% in August from 2.7% in July. This was lower than the FXStreet-cited consensus, which had expected 2.6%.
----------
The factory sector in Ireland swung back into contraction last month, due to a sharp fall in export sales, according to purchasing manager's index survey results released by S&P Global on Tuesday. The AIB Ireland manufacturing PMI registered 49.4 points in September, down from 50.4 points in August. The score was below the neutral 50-point mark for the first time in three months. The survey showed export orders shrinking for the eighth straight month. Overall weak demand conditions caused factory output to fall for the first time since June, S&P Global said.
----------
BROKER RATING CHANGES
----------
Bernstein raises IAG price target to 230 (220) pence - 'outperform'
----------
Barclays cuts Aston Martin price target to 235 (300) pence - 'overweight'
----------
Bernstein raises Ryanair price target to 22 (21.50) EUR - 'outperform'
----------
COMPANIES - FTSE 100
----------
Mulberry Group has rejected a possible takeover offer from Frasers Group, at 130p per share. It said that it "carefully" considered the offer, and sought feedback from Challice, its 56% shareholder. However, concludes that a combination of the recent appointment of Andrea Baldo as chief executive officer, alongside a capital raising, gives Mulberry "a solid platform to execute a turnaround and, ultimately, to deliver best value for all Mulberry shareholders." Mulberry said: "The board has concluded that the possible offer does not recognise the company's substantial future potential value. In addition, the board has been informed that Challice is supportive of the company's strategy and has no interest in supporting the possible offer." Frasers, which back in 2020 bought a large chunk of shares in Mulberry at 150p each, currently has a 36.8% stake.
----------
Haleon has agreed to make an off-market purchase of 60.5 million ordinary shares from Pfizer, pursuant to the terms of a share purchase deed entered into by both parties, which was previously approved by Haleon's shareholders. The off-market purchase is being made in conjunction with, and subject to the completion of an offering by Pfizer to institutional investors. The purchase price payable by Haleon to Pfizer for the off-market purchase is GBP3.80 per ordinary share and the total consideration payable will be approximately GBP230 million. On completion of the off-market purchase and Pfizer's offering to institutional investors, Pfizer's interest in Haleon's issued ordinary shares with voting rights is expected to reduce from 22.6% to 15.0%. Follows Monday's news that Pfizer would sell GBP2.7 billion Haleon shares.
----------
AstraZeneca and Daiichi Sankyo's supplemental biologics license application for Enhertu has been granted priority review in the US for the treatment of adult patients with unresectable or metastatic HER2-low or HER2-ultralow breast cancer who have received at least one endocrine therapy in the metastatic setting based on the positive results from the DESTINY-Breast06 Phase III trial which compared Enhertu to chemotherapy.
----------
COMPANIES - FTSE 250
----------
Great Portland Estates lets 6,900 square feet of retail space on a ten year lease at 6/7 Portman Square, Orchard Court, W1 to luxury brand for professional-grade home appliances, Gaggenau. The brand will relocate from its current unit at 40 Wigmore Street, doubling its footprint occupying a prominent position on Portman Square. Head of Retail Sarah Goldman says: "We are delighted that Gaggenau will be opening its new flagship at Portman Square. As one of the leading luxury home appliance brands, the decision to relocate from globally recognised Wigmore St and increase its footprint within the West End highlights the appeal of our central location at Portman & Wigmore, and shows we are committed to strengthening the retail offer."
----------
OTHER COMPANIES
----------
James Halstead reports pretax profit for the year ended June 30 of GBP56.2 million, up 7.9% from GBP52.1 million a year prior. Revenue, however, falls 9.4% to GBP274.9 million from GBP303.6 million. The firm declares a 6.0 pence final dividend, up 4.3% from 5.75p, making its full-year dividend 8.5p, up 6.3% from 8.0p; and marking James Halstead's 49th year of dividend increases. Says full-year profit was helped by gross margin improvement to 44% from 38%. Looking ahead, says "prospects continue to look positive", and that the firm is confident for financial 2025. Additionally, says that Anthony Wild will step down as chair at the December 6 AGM, with CEO Mark Halstead to step up to executive chair. Finance Director Gordon Oliver will step up to CEO, while David Drillingcourt will become finance director.
----------
By Holly Beveridge, Alliance News senior reporter
Comments and questions to [email protected]
Copyright 2024 Alliance News Ltd. All Rights Reserved.