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(Alliance News) - London's FTSE 100 is called to open higher on Wednesday, despite somewhat topsy-turvy trade in Shanghai amid disappointment over a lack of stimulus still hangs over Chinese shares.
The Shanghai Composite was down 5.2% in afternoon dealings, but had recovered earlier recovered lost ground to sit some 2.5% lower shortly after the lunch break. It went into the afternoon down over 5%.
"If Chinese stocks were the real-time pulse check on the party’s determination to revive the sputtering economy, then the barometer is flashing a stark message: sentiment has plunged from euphoria to utter carnage," SPI Asset Management analyst Stephen Innes commented.
"The hopes of a major stimulus-driven rally are wheezing, leaving investors scrambling to reassess their China play."
China said on Tuesday it was "fully confident" of hitting its growth target this year but held off announcing more stimulus measures, leaving markets disappointed.
In early UK corporate news, Rio Tinto announced a lithium acquisition, while Informa looked to the future with confidence after sealing the buy of Ascential. CMC Markets expects to report a swing to half-year profit.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called up 0.2% at 8,209.71
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Hang Seng: down 0.7% at 20,775.51
Nikkei 225: up 0.9% at 39,277.96
S&P/ASX 200: up 0.1% at 8,187.40
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DJIA: closed up 126.13 points, 0.3%, at 42,080.37
S&P 500: closed up 1.0% to 5,751.13
Nasdaq Composite: closed up 1.5% to 18,182.92
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EUR: up at USD1.0968 (USD1.0963)
GBP: marginally higher at USD1.3086 (USD1.3084)
USD: up at JPY148.50 (JPY148.32)
GOLD: up at USD2,614.49 per ounce (USD2,608.13)
(Brent): up at USD77.56 a barrel (USD77.20)
(changes since previous London equities close)
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ECONOMICS
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Wednesday's key economic events still to come:
19:30 BST European Central Bank executive board member Frank Elderson speaks
11:00 BST Ireland industrial production
19:00 BST US FOMC minutes
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Kamala Harris and Donald Trump exchanged barbs over the airwaves as they reached out to the few remaining undecided voters in the final stretch of an election seen as one of the closest in modern US history. Harris has maintained a lead of two-to-three points in national polling since mid-August, despite presidential and vice presidential debates, encouraging jobs data, an interest rate cut, escalating international crises and a devastating hurricane. "I literally lose sleep – and have been – over what is at stake in this election," the Democratic vice president, 59, told radio icon Howard Stern in a 70-minute live interview. A poll from Siena College and The New York Times out Tuesday highlighted the deadlock, finding Harris ahead of her Republican rival by 49% to 46% – although it had the pair in a dead heat in September. Poll-watchers expect the stalemate to break only in the last couple of weeks before election day on November 5, as the small fraction of wavering Americans who will decide the election break one way or the other. In the seven battleground states seen as likely to determine the election, the race is even tighter.
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US President Joe Biden has postponed his planned trip to Germany later this week due to the powerful Hurricane Milton, which is heading for the state of Florida, the White House announced. A trip to Angola, which was to follow Biden's visit to Germany, has also been postponed, according to the White House. No immediate information was provided about when the president, who leaves office in January, intends to make up the trips, but Biden said he would call German Chancellor Olaf Scholz to discuss the change of plans. "I'm going to be talking today with my friend, the chancellor of Germany, and we're going to try to work that out," Biden said during a short address on the hurricane at the White House. "I'm still planning on visiting all the places I should be," the US president said. Biden had been expected to arrive in Berlin on Thursday evening, where he was scheduled to meet Scholz and President Frank-Walter Steinmeier. The US president had planned to then travel to the western German state of Rhineland-Palatinate on Saturday, where he was to host a Ukraine summit at the US air base in Ramstein. "President Biden is no longer travelling to Ramstein to participate in the Ukraine defence Contact Group," Deputy Pentagon Press Secretary Sabrina Singh said. US Secretary of State Antony Blinken had also cancelled his planned trip to Germany, the Pentagon said.
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BROKER RATING CHANGES
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Berenberg cuts Vistry price target to 1,000 (1,380) pence - 'hold'
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RBC cuts Pennon Group to 'sector perform' (outperform) - price target 675 (725) pence
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COMPANIES - FTSE 100
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Rio Tinto announced a deal to acquire Arcadium Lithium, creating a "global leader in energy transition commodities". The deal values the lithium producer at USD6.7 billion. Rio will pay USD5.85 in cash per share, a 90% premium to New York-listed Arcadium's closing price at the end of last week. Rio Tinto announced a possible approach for Arcadium on Monday. Arcadium has assets in nations including Argentina, the US and China. Rio Tinto said: "The transaction will bring Arcadium's world-class, complementary lithium business into Rio Tinto's portfolio, establishing a global leader in energy transition commodities - from aluminium and copper to high-grade iron ore and lithium." The deal is expected to close in mid-2025.
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Informa sealed the acquisition of London-listed Ascential, as the FTSE 100 constituent now looks ahead to a tie-up with TechTarget. The GBP1.2 billion buy of the Cannes Lions operator received court sanctioning on Tuesday. Informa said Wednesday its "growth, focus and reinvestment" in recent years in the space of Live & On-Demand B2B Events, B2B Digital Services and Academic Markets will see it enter 2025 with revenue of over GBP4 billion. Next year, it will establish "three focused Live B2B Events businesses", including an Informa Festivals offering. Informa Festivals will include Ascential's Cannes Lions and Money20/20. Informa backed its 2024 outlook, saying its underlying trading "remains strong". It still expects double-digit underlying top-line growth, revenue of over GBP3.5 million and adjusted operating profit of over GBP970 million. Informa in January had announced a merger of its Tech digital businesses with New York-listed TechTarget. Informa Chief Executive Stephen Carter said: "The completion of the Ascential acquisition, creation of Informa Festivals and prospective creation of Informa TechTarget will establish leadership and scale in all our chosen B2B market segments, complementing our strength in Academic markets and creating a platform for growth from 2025 to 2030." Ascential shares are no longer trading in London. Chrysalis Investments replaces it on the FTSE 250, according to an update from FTSE Russell on Friday.
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COMPANIES - FTSE 250
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CMC Markets expects to report a swing to first-half profit, as the provider of online financial trading hailed its "diversification strategy". For the half-year to September 30, it expects to report pretax profit of GBP51 million, swinging from a loss of GBP2 million. Net operating income of around GBP180 million is expected, up 45% from GBP123 million a year prior. What's more, CMC expects to report operating costs of GBP113 million for the first half, trimmed from GBP122 million a year prior. The cost figure excludes "variable remuneration and non-recurring charges". "The strong performance reflects the success of our ongoing diversification strategy, continued expansion of the B2B segment, and sustained levels of client trading activity. Management remains focused on growing profit margins and taking a disciplined and balanced approach to investment whilst driving efficiencies through the business," CMC said. "From an operational standpoint, the group has continued to enhance its service offering across platforms with the expansion of cash equities and options products, as well as the upcoming launch of cash ISAs in the UK underpinned by our treasury management division and proprietary technology." CMC added that onboarding of Revolut clients has kicked off after a "soft launch". CMC had announced a partnership with Revolut back in June. The deal gives customers at the fintech access to the "CMC Markets Connect trading universe". "FX, Index, Commodities, Treasuries and Equity CFDs will be offered initially, with the ability to support other asset classes in the future as the relationship develops and matures," CMC Chief Executive Officer Peter Cruddas said at the time.
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OTHER COMPANIES
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Pub operator Marston's said it outperformed the market in its full-year. In the 52 weeks to September 28, retail sales in managed and franchised pubs rose 5.8% on-year. On a like-for-like basis, they increased 4.8%, "outperforming the broader market". For the final 13 weeks of the period, like-for-like sales climbed 3.8%, despite "very wet weather". It expects to meet consensus for underlying pretax profit of GBP40.5 million.
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By Eric Cunha, Alliance News news editor
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