19th Oct 2020 07:47
(Alliance News) - Stock prices in London are called marginally lower on Monday, lagging European peers which are expected to take heart from data in China showing the world's second largest economy is continuing its bounce from Covid-19 lows.
Gross domestic product figures from China did slightly disappoint, with third-quarter growth coming in a bit lower than forecast.
In early company news on the London Stock Exchange, AstraZeneca reported a pair of European regulatory boosts, and real estate investment trust Land Securities unveiled a strategic plan which could see it exit "subscale sectors over time, where we have little or no competitive advantage".
IG futures indicate the FTSE 100 index is to open 8.3 points lower at 5.917.8. The blue-chip index closed 1.5%, or 87.06 points, higher at 5,919.58 on Friday.
The DAX 30 and CAC 40 are called 0.1% and 0.2% higher, respectively, however.
The pound was quoted at USD1.2939 early Monday, up from USD1.2924 at the equities close on Friday.
The euro stood at USD1.1710, down from USD1.1718 at the European equities close Friday.
Landsec, ahead of the FTSE 100 firm's virtual capital markets day on Monday, set out a new strategic plan.
Perhaps the most notable measures unveiled will see Landsec "realise and recycle capital" from the sale of properties in the hotels, leisure and retail parks space, three assets battered by Covid-19.
The firm added a review has found that "certain elements of our portfolio are subscale".
On the whole however, the property firm painted an optimistic picture about its retail assets, despite its regional shopping centres being among the worst-hit by the pandemic.
"Not all retail is the same. Regional shopping centres have been most impacted by these challenges, but these represent only 13% of our portfolio and our shopping centres are amongst the very best in the sector. Of the balance, our outlets remain an attractive subsector, many of our suburban shopping centres offer significant repurposing potential and our investment in retail parks is modest," Landsec explained.
Landsec also was bullish about the "quality of the central London portfolio", 64% of its property assets by value.
"London remains one of the world's gateway cities, and this portfolio represents a good source of liquidity over time, it said.
Pharmaceutical firm AstraZeneca started the week with a pair of postive European regulatory opinions for its drugs.
Forxiga has been recommended for an extension of its European Union marketing authorisation to treat sufferers of symptomatic chronic heart failure. The endorsement from The Committee for Medicinal Products for Human Use was based on promising results from the DAPA-HF Phase III trial.
Also getting a recommendation was Astra's Trixeo Aerosphere medication used to treat some adult patients with moderate to severe chronic obstructive pulmonary disease.
Elsewhere in London, boohoo Group said PwC remains its auditor "at this time", despite press reports saying the accounting firm will quit over concerns about the online retailer's reputation.
Citing two people familiar with the matter, the Financial Times on Friday reported PwC has signalled its intention to quit as boohoo's auditor with the past month.
"The group would like to place on record that PwC is still the group's auditor at this time. The group's audit committee has recently launched a competitive tender process for the group's audit, and will update shareholders at its conclusion. PwC signed an unqualified opinion on the group's 2020 financial statements and having served as the group's auditor since 2014, is not participating in this process," boohoo said on Monday.
Fast-fashion retailer boohoo recently arranged for an independent probe of its supply chain and in September said it would make "substantive, long-lasting and meaningful change".
The review was launched by boohoo in July following claims it sold clothes made in factories where staff were paid less than the minimum wage.
The Sunday Times newspaper had reported allegations that workers in Leicester's Jaswal Fashions factory making clothes for boohoo brand Nasty Gal were being paid as little as GBP3.50 an hour and operating without social distancing measures in place.
boohoo denied Jaswal Fashions was ever a supplier, however.
Official data in China showed the country's economy is sustaining its rebound from tight virus lockdowns and moving closer to pre-pandemic levels.
"Investors are beginning the week with some optimism concerning the US stimulus aid package, and a broader economic recovery in China is also boosting the sentiment. The Chinese economic numbers, such as the third-quarter GDP, retail sales, industrial production, and several other indicators, do show that China is recovering its losses caused by Coronavirus," AvaTrade Chief Market Analyst Naeem Aslam explained.
China's economy grew 4.9% on-year in the third quarter, the National Bureau of Statistics said, though this was slightly below expectations. Analysts polled by AFP earlier pegged third-quarter growth in China, where the coronavirus first surfaced, at 5.2% from a year ago, up from the second quarter's 3.2% rise.
NBS data also showed retail sales grew faster than expected in September at 3.3%, up from 0.5% growth on-year the month before.
But this still lagged behind industrial output growth, which came in stronger than expected at 6.9% from a year ago last month.
Among Asian stock markets on Monday, the Shanghai Composite index gave up morning gains and was 0.7% lower in late afternoon trade. The Hang Seng index in Hong Kong was up 0.6%, while Tokyo's Nikkei 225 closed up 1.1%.
In the US on Friday, Wall Street ended mixed. The Dow Jones Industrial Average climbing 0.4%, the S&P 500 ending flat and the Nasdaq Composite closing 0.4% down.
The US third-quarter earnings calendar continues with reports from IT consulting firm IBM on Monday, streaming giant Netflix on Tuesday, and electric vehicle maker Tesla on Wednesday.
Against the yen, the dollar was trading at JPY105.40, flat late Friday.
Brent was changed hands at USD42.77 a barrel on Monday morning, down from USD43.00 at the London equities close on Friday. An ounce of gold fetched USD1,910.43, up from USD1,900.51.
Still to come on the data calendar on Monday are EU construction output figures at 1000 BST.
By Eric Cunha; [email protected];
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