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London open: Stocks nudge up as investors mull UK GDP figures
London stocks nudged higher in early trade on Wednesday as data showed the UK economy continued to stagnate in July.
At 0855 BST, the FTSE 100 was up 0.1% at 8,213.59.
Figures released earlier by the Office for National Statistics showed zero growth in gross domestic product, unchanged on June. Economists had been expecting 0.2% growth.
Output in the services sector grew 0.1% in July following a 0.1% decline in June. Meanwhile, production output fell 0.8% following 0.8% growth in June and construction output fell 0.4% following 0.5% growth in June.
Liz McKeown, director of economic statistics at the ONS, said: “July’s monthly services growth was led by computer programmers and health, which recovered from strike action in June. These gains were partially offset by falls for advertising companies, architects and engineers.
“Manufacturing fell, overall, with a particularly poor month for car and machinery firms, while construction also declined.”
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “UK growth continued to flatline in July after a lacklustre June but it’s raising the expectations for interest rate cuts, which is giving a little support for UK stocks early in the session.
“A rise in output from the large services sector was offset by a fall in production and construction during the month. This picture of stagnation is another piece in the jigsaw for Bank of England policymakers to consider when they meet next week.
“There may be slightly heightened concerns around the table that the economy is on the cusp of a downturn. This will reinforce expectations for two rate cuts in the months to come, but the jury is still very much out when it comes to next week’s decision. Financial markets have been assessing the chance that rates will be kept on hold as above 75%, so this data point alone is unlikely to move the dial significantly.”
In equity markets, Rightmove ticked higher after it rejected a £5.6bn takeover proposal from Australian peer REA Group, labelling it “wholly opportunistic” and saying it undervalues the UK property platform’s future prospects.
On 5 September, REA proposed 305p in cash and 0.0381 new REA shares for each Rightmove share, which implied an offer value of 698p – a 26% premium to the closing price before REA confirmed speculation about its intentions.
REA said in a statement that the proposal was a “highly compelling proposition”, while Rightmove urged its shareholders not to take any action.
WH Smith surged as it reiterated its full-year outlook and unveiled a £50m share buyback after a buoyant fourth quarter.
The retailer said group sales rose 6% in the three months to 31 August, which includes its peak summer trading period, or by 4% on a like-for-like basis.
Trustpilot was also in the black as it said first-half profit was ahead of market expectations and announced a further £20m share buyback.
On the downside, Rentokil tumbled as the pest control firm scaled back its profit guidance for the full year after weaker-than-expected summer trading in North America.
Dunelm fell as it reported a rise in full-year profit and sales despite a “softer” market and said it continues to see “a challenging consumer environment” and that the timing of a sector recovery remains uncertain.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Prudential Plc | +2.29% | +13.80 | 615.20 |
| 2 |  |
Bhp Group Limited | +1.79% | +35.00 | 1,989.50 |
| 3 |  |
Antofagasta Plc | +1.68% | +28.00 | 1,691.50 |
| 4 |  |
Melrose Industries Plc | +1.35% | +6.20 | 464.70 |
| 5 |  |
Wise Plc | +1.35% | +8.50 | 638.50 |
| 6 |  |
Carnival Plc | +1.33% | +14.50 | 1,105.00 |
| 7 |  |
Bt Group Plc | +1.32% | +1.85 | 141.90 |
| 8 |  |
Next Plc | +1.25% | +125.00 | 10,150.00 |
| 9 |  |
Rio Tinto Plc | +1.24% | +56.50 | 4,617.50 |
| 10 |  |
Glencore Plc | +1.20% | +4.35 | 367.80 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Rentokil Initial Plc | -17.69% | -84.10 | 391.40 |
| 2 |  |
Astrazeneca Plc | -1.79% | -222.00 | 12,184.00 |
| 3 |  |
Jd Sports Fashion Plc | -1.64% | -2.30 | 138.20 |
| 4 |  |
Smurfit Westrock Plc | -1.29% | -43.00 | 3,299.00 |
| 5 |  |
Compass Group Plc | -0.97% | -24.00 | 2,449.00 |
| 6 |  |
Pearson Plc | -0.90% | -9.50 | 1,043.00 |
| 7 |  |
Gsk Plc | -0.75% | -12.50 | 1,658.50 |
| 8 |  |
Diploma Plc | -0.72% | -32.00 | 4,408.00 |
| 9 |  |
Ferguson Enterprises Inc. | -0.69% | -100.00 | 14,400.00 |
| 10 |  |
Smith (ds) Plc | -0.62% | -2.80 | 451.60 |
US close: Stocks mixed ahead of presidential debate
Wall Street stocks turned in a mixed performance on Tuesday following big wins for major indices in the previous session.
At the close, the Dow Jones Industrial Average was down 0.23% at 40,736.96, while the S&P 500 advanced 0.45% to 5,495.52 and the Nasdaq Composite saw out the session 0.84% firmer at 17,025.88.
The Dow closed 92.63 points lower on Tuesday, taking a bite out of gains recorded on Monday.
In focus on Tuesday, on the macro front, the National Federation of Independent Business‘ small business optimism index decreased to 91.2 in August, the lowest reading in three months, down from 93.7 in July and significantly less than the 93.6 reading expected by economists.
“Historically high inflation remains the top issue for owners as sales expectations plummet and cost pressures increase. Uncertainty among small business owners continues to rise as expectations for future business conditions worsen”, said NFIB chief economist Bill Dunkelberg.
The presidential debate between vice president Kamala Harris and former White House resident Donald Trump will also draw an amount of investor attention, with the two set to duke it out at 0200 BST.
In the corporate space, cloud computing giant Oracle shares rallied after posting Q1 results that topped expectations on the Street, while Apple traded lower as news that it had lost a €13.0bn EU tax case overshadowed the unveiling of its new iPhone handsets.
Wednesday newspaper round-up: Port Talbot, Amazon, Tripadvisor
The British steel industry is braced for 2,500 job cuts at the Port Talbot steelworks, with thousands more jobs at risk in the UK, as the government prepares a taxpayer-backed deal for the south Wales plant. The business secretary, Jonathan Reynolds, is expected to outline on Wednesday details of a rescue deal which will see the government hand the historic Welsh plant’s owners, Tata Steel, £500m to build a new electric furnace – but at the cost of huge redundancies from the closure of its last remaining blast furnace. – Guardian
Amazon’s cloud computing arm will invest £8bn in the UK to build datacentres that support customers in London and the west of England, Rachel Reeves said on Wednesday. The chancellor said the investment, which it was estimated would create as many as 14,000 jobs at Amazon and in local businesses, was part of the government’s “long-term mission to boost growth, unlock investment and make every part of Britain better off”. – Guardian
Tripadvisor has provoked anger by abruptly cancelling holidaymakers’ accommodation bookings as the company shut down its Airbnb rival. The travel website emailed tenants and hosts on Tuesday to say that it would no longer honour reservations after Nov 1. Tripadvisor, best known for reviews and travel guides, acquired a string of holiday booking websites during the 2010s in an attempt to take on websites such as Airbnb. – Telegraph
The former head of oil at Glencore has appeared in court in London to face corruption charges relating to the commodities trader’s operations in Africa. Alex Beard, 57, has been charged by the Serious Fraud Office with two counts of conspiracy to make corrupt payments to government officials and officials of state-owned oil companies in Nigeria between 2010 and 2014, and in Cameroon between 2007 and 2014. He would plead not guilty, his lawyer told Westminster magistrates’ court. – The Times
The serviced offices provider that owns Regus has been told by one of its largest shareholders to move its stock market listing to the United States “immediately”. Buckley Capital Management said that switching from London to New York would help to boost IWG’s flagging share price, which is struggling 60 per cent below its pre-pandemic level. – The Times
