(Alliance News) - Stocks in London were called to start the new week flat on Monday, while the Hang Seng in Hong Kong slumped after Xi Jinping secured a rare third term as leader of China.
In the UK, Tory members of Parliament will choose who they want to be their new leader in the first stage of the race for No 10 after Boris Johnson dramatically pulled out of the contest.
The former prime minister claimed he had the nominations needed to make it onto the ballot paper but admitted he could not unite his warring party.
His withdrawal means the contest could be decided by early afternoon on Monday unless both the remaining candidates can get the support of 100 MPs.
While Sunak, the former chancellor, already has more than 140 public declarations of support, Mordaunt, the leader of the house, had fewer than 30.
Sterling was moving higher after Johnson announced his decision not to run.
Stocks in China slumped after Xi on Sunday was confirmed as general secretary of China's Communist Party's for a rare third term, disregarding traditionally respected age and term limits and cementing his grip on power.
A day earlier the National Congress of the Chinese Communist Party, held only every five years, amended the party constitution to more deeply reflect Xi's ideology and enshrine his leadership role.
China's economy grew 3.9% year-on-year in the third quarter, according to official data released on Monday, beating forecasts.
China had been expected to announce some of its weakest quarterly growth figures since 2020, with its economy hobbled by Covid-19 restrictions and a real estate crisis.
In the previous quarter, growth in the world's second-largest economy collapsed to 0.4% compared with the previous year, the worst performance since 2020. The country posted 4.8% growth in the first quarter of 2022.
But Monday's data, published six days later than scheduled, showed a slight rebound, with China posting growth higher than the 2.5% predicted by a panel of experts surveyed by AFP.
In the US on Friday, stocks ended sharply higher, boosted by a Wall Street Journal report that said some US Federal Reserve officials want to slow the pace of rate rises after the November central bank meeting.
Here is what you need to know ahead of the London market open:
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MARKETS
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FTSE 100: called flat, up just 0.87 of a point at 6,970.60
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Hang Seng: down 6.2% at 15,206.74
Nikkei 225: closed up 0.5% at 15,206.74
S&P/ASX 200: closed up 1.5% at 6,779.40
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DJIA: closed up 748.97 points, or 2.5%, at 31,082.56
S&P 500: closed up 86.97 points, or 2.4%, at 3,752.75
Nasdaq Composite: closed up 244.87 points, or 2.3%, at 10,859.72
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EUR: higher at USD0.9852 (USD0.9802)
GBP: higher at USD1.1369 (USD1.1203)
USD: higher at JPY148.95 (JPY148.03)
GOLD: higher at USD1,656.10 per ounce (USD1,643.70)
OIL (Brent): lower at USD92.71 a barrel (USD92.84)
(changes since previous London equities close)
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ECONOMICS
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Monday's key economic events still to come:
1000 CEST EU flash purchasing managers' index
0915 CEST France flash PMI
0930 CEST Germany flash PMI
0930 BST UK flash PMI
0830 EDT US Chicago Fed national activity index
0945 EDT US flash PMI
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Cities have driven house price growth in the UK this year, leaving the suburbs lagging behind, according to research. Since the start of the year, as people have gradually returned to the office, property prices across Britain's cities have typically grown by 9.2%, compared with 7.9% growth on average in surrounding areas, lender Halifax said. Andrew Asaam, mortgages director at Halifax, said a trend of people looking for greener spaces to move to, which was seen early on in the coronavirus pandemic, has remained intact.
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Japan's services and manufacturing sectors are expected to improve in October, flash data showed, as activity and order book levels were boosted by the recent easing in international border restrictions and the launching of the Nationwide Travel Discount Programme. The au Jibun Bank flash Japan services business activity index improved to 53.0 in October from 52.2 in September, indicating a second successive month of expansion and the strongest performance in four months. The flash manufacturing purchasing managers' index also improved slightly, rising to 48.7 in October versus 48.3 in September. This still remains below the 50.0 mark that separates growth from contraction. As a result of improved performance in both service and manufacturing, the flash Japan composite PMI increased to 51.7 in October from 51.0 in September.
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North and South Korea said they exchanged warning shots along their disputed western sea boundary. South Korea's military says its Navy fired warning shots to repel a North Korean merchant ship that it says violated the sea boundary early on Monday. North Korea's military said it responded by firing 10 rounds of artillery shells as a warning to South Korea. The incident comes amid heightened tensions over North Korea's recent barrage of missile tests. The poorly marked sea boundary off the Korean Peninsula's west coast is a source of long-running animosity between the two countries. It is a scene of several bloody inter-Korean naval skirmishes and violence in recent years, including the two attacks in 2010 that killed 50 South Koreans. In recent weeks, North Korea has carried out a string of weapons tests in response to what it calls provocative military drills between South Korea and the US.
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BROKER RATING CHANGES
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HSBC raises BP to 'buy' ('hold') price target 530 pence (475p)
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Deutsche Bank cuts Admiral price target to 2,490 pence (2,620p) - 'hold'
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Deutsche Bank cuts St James's Place price target to 1,310 pence (1,370p) - 'buy'
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Deutsche Bank cuts Hargreaves Lansdown price target to 900 pence (940p) - 'hold'
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COMPANIES - FTSE 100
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Shell and QatarEnergy announces that Shell will take a 9.375% in a huge gas field extension offshore Qatar for an undisclosed sum. TotalEnergies last month said it had been selected for a 9.375% participating interest as well. QatarEnergy, which will retain 75% of the project, said a third international partner will be announced "in due course", with a 6.25% stake remaining. The North Field South expansion project is expected to have capacity for 16 million tonnes per year of liquefied natural gas. The overall North Field expansion project, which also includes North Field East, is "the industry's largest ever LNG project", QatarEnergy said. Starting production in 2026, it will add more than 48 million tonnes per annum to world LNG supplies by 2027. The project has taken on particular significance in recent months, after Russia's invasion of Ukraine restricted gas supply to Europe. QatarEnergy estimates that the North Field, which extends under the Gulf into Iranian territory, holds about 10% of the world's known gas reserves.
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Education publishing firm Pearson says trading in the nine months to September 30 was "strong", with underlying sales up 7% year on year, allowing the company to reaffirm its full year sales and adjusted profit outlook. "We believe Pearson is well positioned for the future, and we are confident of being able to navigate the challenging macroeconomic environment," Chief Executive Andy Bird said. Assessment & Qualifications sales grew 12% in the nine-month period, Pearson noted, with Virtual Learning up 5%, and English Language Learning surging 28%. Higher Education sales were down 4%, holding back the overall growth.
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Frasers Group says its investment in the shares of German fashion designer Hugo Boss is now 4.3%, while it additionally has a 28.5% interest via put options that it has sold. Notes its maximum exposure for the interest is EUR960 million. Frasers says the holding in Hugo is just "ordinary course of business" for the firm as it continues to seek "opportunities that strengthen Frasers Group's brand proposition". It previously held a 4.9% stake via shares and a further 26% via options. Separately, Frasers notes its acceptance level for its mandatory MySale takeover offer is currently just under 60%. The closing date for the offer is November 1.
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OTHER COMPANIES
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Billing, charging and customer management systems firm Cerillion says its annual revenue - for financial year that ended September 30 - will be marginally ahead of market expectations, while adjusted profit will be materially ahead of the consensus market forecast of GBP10.1 million. "Cerillion entered the second half of the financial year with a strong back-order book and continued to trade very well throughout the period, including securing the company's largest contract to date in the fourth quarter," it explains. Notes it also benefited from "significantly" from favourable foreign exchange rates and "higher resource utilisation".
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By Paul McGowan; paulmcgowan@alliancenews.com
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