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London open: Stocks edge up in quiet trade
London stocks edged up quiet trade early on Friday, with little in the way of market-moving news to provide any direction.
At 0845 BST, the FTSE 100 was up 0.2% at 8,259.89.
Derren Nathan, head of equity research at Hargreaves Lansdown, said: “After an ugly start to September, historically a poor month for equity returns, global stock markets are broadly back to where they ended last month. There’s not been any major catalyst for this rebound, more so a lack of negative surprises on the inflation front. That trend continued yesterday with US producer price rises up 1.7% in the year to August against expectations of 1.8%.
“That helped the S&P 500 to end the day up fractionally, with the tech-dominated Nasdaq composite faring a bit better adding 0.5%, in a third consecutive day of gains. Over the week, all major US indices are in positive territory.
“However, the data may not be enough to persuade the Fed to cut rates by any more than a quarter-point next Wednesday, in what’s expected to be the first reduction in the Federal Funds Rate in over four years.”
There are no UK data releases of note due but in the US, investors will eye the University of Michigan‘s preliminary consumer sentiment survey for September at 1500 BST. Before that, eurozone industrial production data for July is due at 1000 BST.
In equity markets, Fresnillo and Endeavour shone as gold prices reached new record highs of over $2,500 per ounce.
Nathan said: “The glittering performance has been buoyed by sustained high levels of purchases by central banks in the face of a weakening dollar, geopolitical uncertainty and the downward looking trajectory for interest rates. These conditions could persist for a while so there’s potential for the high-water mark to rise further in the coming months.”
Vodafone was in the black despite the Competition and Markets Authority saying that its planned merger with Three may be expected to result in a “substantial” lessening of competition and higher prices for consumers.
The competition watchdog cited the supply of mobile telecommunications services to end customers and the supply of wholesale as two areas of concern.
Paddy Power owner Flutter Entertainment fell as it announced the acquisition of a a 56% stake in NSX Group, a Brazilian operator of the Betnacional brand, for around $350m.
Flutter said the deal fully aligns with its strategy to invest in leadership positions in international markets, “securing a podium position for Flutter on completion in the regulating and fast-growing Brazilian market”.
Infrastructure group Balfour Beatty edged up after it was awarded a £363m contract by National Grid to deliver the Bramford to Twinstead Reinforcement project.
In broker note action, AstraZeneca was knocked lower by a downgrade to ‘sell’ at Deutsche Bank.
Rio Tinto ticked higher after an upgrade to ‘outperform’ at Macquarie.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
South32 Limited | +2.53% | +4.00 | 162.40 |
| 2 |  |
Banco Santander S.a. | +1.67% | +6.00 | 366.00 |
| 3 |  |
Rentokil Initial Plc | +1.56% | +5.80 | 377.80 |
| 4 |  |
Jd Sports Fashion Plc | +1.55% | +2.25 | 147.15 |
| 5 |  |
Intermediate Capital Group Plc | +1.51% | +34.00 | 2,282.00 |
| 6 |  |
Intertek Group Plc | +1.47% | +73.00 | 5,035.00 |
| 7 |  |
Wpp Plc | +1.27% | +9.40 | 749.40 |
| 8 |  |
Bhp Group Limited | +1.27% | +25.00 | 2,001.00 |
| 9 |  |
Halma Plc | +1.18% | +30.00 | 2,575.00 |
| 10 |  |
Bt Group Plc | +1.10% | +1.60 | 146.85 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Sainsbury (j) Plc | -2.91% | -8.60 | 287.20 |
| 2 |  |
Astrazeneca Plc | -2.26% | -272.00 | 11,778.00 |
| 3 |  |
Ck Infrastructure Holdings Limited | -2.11% | -12.00 | 558.00 |
| 4 |  |
Marks And Spencer Group Plc | -1.51% | -5.30 | 346.50 |
| 5 |  |
Compass Group Plc | -1.39% | -34.00 | 2,418.00 |
| 6 |  |
Tesco Plc | -1.25% | -4.60 | 364.40 |
| 7 |  |
Flutter Entertainment Plc | -1.19% | -200.00 | 16,640.00 |
| 8 |  |
Carnival Plc | -0.90% | -10.50 | 1,156.00 |
| 9 |  |
Sage Group Plc | -0.77% | -8.00 | 1,030.00 |
| 10 |  |
Rolls-royce Holdings Plc | -0.71% | -3.50 | 490.30 |
US close: Stocks rise as producer price inflation eases
US stocks put in solid gains on Thursday as investors assessed how slowing producer-price inflation would affect the near-term outlook for interest rates ahead of the Federal Reserve’s next policy meeting.
The Dow finished 0.6% higher while the S&P 500 rose 0.8% and the Nasdaq jumped 1%, with the latter two indices recording their fourth consecutive days in positive territory.
In economic data, US producer price inflation slowed to a six-month low of 1.7% in August, from a revised 2.1% in July and slightly under the 1.8% expected by the market. Over the month, wholesale prices rose by 0.2% as anticipated.
Meanwhile, US initial jobless claims rose by 2,000 week-on-week to 230,000, well above average seen earlier in the year but in line with consensus forecasts.
“The data fits into the ‘more encouraging’ category of price data Federal Reserve officials have been looking for, but alongside a more benign employment report in August, we think incoming data supports a 25bps cut in September, and markets have recently moved closer in line with our view,” said Matthew Martin, US economist at Oxford Economics.
“However, with nearly 100bps of cuts still pencilled in by year-end, we think expectations remain too aggressive,” Martin added. The Federal Open Market Committee meeting will take place next Wednesday.
Market movers
Kroger shares popped 7% as investors digested the grocer’s updated guidance following a mixed second-quarter performance. Second-quarter sales were flat at $33.9bn, slightly behind the $34.1bn consensus forecast, but the company still raised its full-year sales growth guidance to 1.75% minus fuel, from 0.75% previously.
Shares in Moderna tumbled 12% after the biotech giaint detailed plans to cut its research budget by more than $1bn. The firm said it would focus on ten product approvals through 2027, but discontinue five programmes in its pipeline, as it looks to cut research and development expenses to around $3.6bn-$3.8bn.
Food manufacturer General Mills finished flat after announcing the split-up and sale of its North American yoghurt business to two French dairy companies in a $2.1bn deal.
Microsoft rose on reports that it is cutting 650 jobs from its video game division. According to a company email seen by The Wall Street Journal, the job cuts are not a result of closures or cancellations to any games, devices or studios – unlike May’s layoffs when three studios were closed.
Mastercard edged higher on the news that it will buy cyber defence company Recorded Future, the world’s largest threat intelligence company, from Insight Partners for $2.65bn.
Friday newspaper round-up: High speed rail line, Boeing, Grangemouth
A plan for a new high-speed rail line linking Birmingham and Manchester has been unveiled, claiming to deliver most of the benefits of the scrapped northern leg of HS2 at significantly cheaper cost and with only slightly longer journey times. The 50-mile track would run from where the HS2 line is now due to end in Staffordshire to join a planned Northern Powerhouse Rail line west of Manchester airport, under a plan unveiled by the mayors of Greater Manchester and the West Midlands. – Guardian
Boeing workers voted on Thursday night to strike for higher pay, halting production of the planemaker’s strongest-selling jet as it wrestles with chronic output delays and mounting debt. Newly installed Boeing CEO Kelly Ortberg pleaded with workers not to go on strike – the first since 2008 – ahead of the vote, saying the action would put the company’s “recovery in jeopardy”. – Guardian
Low-paid migrant workers are an immediate drain on the public purse, costing taxpayers more than £150,000 each by the time they hit state pension age, according to the Government’s tax and spending watchdog. The Office for Budget Responsibility (OBR) said the average low-earner who came to Britain aged 25 cost the Government more overall than they paid in from the moment they arrived. – Telegraph
Scotland’s last remaining oil refinery at Grangemouth is to close next year with the loss of 400 jobs, leaving the UK with only a handful of refineries and increasing the country’s reliance on imported fuel. The site’s owner Petroineos, a joint venture between Sir Jim Ratcliffe’s Ineos and PetroChina, believes that domestic demand for motor fuels will fall sharply with the forthcoming ban on new petrol and diesel cars. – The Times
Artificial intelligence has moved to more human-like reasoning, OpenAI has claimed, with the launch of its latest model. In a blogpost, the ChatGPT maker said that “much like a person would”, its new o1 series would spend more time thinking before it responded to queries. The company said it could “reason through complex tasks and solve harder problems than previous models in science, coding, and maths”. – The Times
