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(Alliance News) - Stocks in London are to open higher on Monday, ahead of flash composite purchasing managers' index data from the US, the UK and mainland Europe.
After last week's various central bank interest rate calls, this week's economic calendar is lighter.
However, investors will still be on the lookout for key US data releases including Monday's PMI, consumer confidence on Tuesday, gross domestic product on Thursday and the personal consumption expenditures inflation data on Friday. Friday's release includes the core PCE reading, the Federal Reserve's preferred inflationary gauge.
"The release of flash PMIs around the world this week will let investors know if they are correct in pricing soft landings. There are also a lot of Fed speakers this week, including Jay Powell on Thursday," analysts at Dutch bank ING commented.
In early UK corporate news, Rightmove received another takeover proposal from REA Group, though the Sydney listing bemoaned a lack of engagement. AstraZeneca backed the "clinical value" for its Dato-DXd offering, despite underwhelming findings.
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 0.7% at 8,285.19
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Hang Seng: up 0.3% at 18,314.24
S&P/ASX 200: down 0.7% at 8,152.90
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DJIA: closed up 38.17 points, 0.1%, at 42,063.36
S&P 500: closed down 11.09 points, 0.2%, at 5,702.55
Nasdaq Composite: closed down 65.66 points, 0.4%, at 17,948.32
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EUR: down at USD1.1161 (USD1.1164)
GBP: up at USD1.3312 (USD1.3307)
USD: up at JPY144.10 (JPY143.85)
GOLD: higher at USD2,629.47 per ounce (USD2,622.00)
OIL (Brent): higher at USD75.06 a barrel (USD74.43)
(changes since previous London equities close)
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ECONOMICS
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Monday's key economic events still to come:
08:00 BST eurozone flash composite PMI
08:30 BST Germany flash composite PMI
09:30 BST UK flash composite PMI
13:30 BST US Chicago Fed national activity index
14:45 BST US flash composite PMI
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UK Chancellor Rachel Reeves will insist that "tough decisions" on the public finances are needed to prevent economic ruin but she will attempt to persuade her critics that there will be "no return to austerity", PA reports. In her first Labour conference speech as Chancellor, she will also promise action to tackle tax dodgers and claw back money from flawed Covid-era contracts. But her decision to strip winter fuel payments from ten million pensioners is likely to be the focus of a fierce debate at the party's conference in Liverpool, with major trade unions demanding a U-turn on the policy. Union sources indicated the issue would be debated on the conference floor after Reeves' speech on Monday, although a vote on the call for a reversal of the policy could be pushed back until later in the week. The chancellor will say her October 30 Budget statement will deliver on the change Labour offered at the election. After weeks of warning about a poor economic legacy left by the Conservative government, Reeves will attempt to strike a more positive note, saying "my optimism for Britain burns as bright as it ever has done". Reeves will insist economic stability is "the crucial foundation on which all our ambitions will be built", as she seeks to justify to Labour members the spending restrictions which are aimed at filling a GBP22 billion "black hole" in public finances.
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Angela Rayner has said she intends to "fix" the UK Right to Buy scheme and make it a "fair system" for taxpayers and tenants. Speaking at a Labour conference fringe event in Liverpool, the Deputy Prime Minister suggested that changes had to be made to the scheme to secure "social housing into the future". Right to Buy legislation allows tenants renting local authority-owned homes to buy them at a discounted rate. Rayner said: "Housing is not just about a house, housing is about a home. "It's about people's social wellbeing, it's about people's health, it's about people's education, it's about people's recreation, it's about support, it affects every single aspect of a person's life, so we have to have a whole government approach to it. "But this Labour government is absolutely determined that we will have the biggest wave of social housing of a generation, and we are also going to have to fix the situation in Right to Buy. "I've said that I'll do a consultation on this, but the changes that they made in 2012 mean that more of our council homes are being sold off and we just can't replace them. "So there's no point in me having the biggest wave in a generation of council homes through one way, and then not being able to replace them as they go out the door the next. "So we've got to have a fair system. "And, I think if you've raised your kids, you've lived in the house for decades and you want to buy the house, I think it's absolutely reasonable and right that people should be given that opportunity.
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UK fuel prices are falling faster than at any other point in 2024 so far, new figures show according to PA. Average prices for petrol and diesel across UK forecourts are nearly 7 pence per litre cheaper than a month ago, sinking to their lowest level in almost three years. Typical per-litre petrol prices have fallen from 142.9p to 136.2p, while diesel has dropped from 147.7p to 140.9p. That means the cost of filling a 55-litre family car is almost GBP4 cheaper than a month ago. The RAC attributed the fall in prices to a combination of a drop in oil prices to USD73 dollars per barrel amid lower global demand, while the strength of the pound against the US dollar means UK fuel retailers get better value on the wholesale market. The motoring services company expects average pump prices to fall to a three-year low as soon as the end of September. It said average per litre prices could sink to 132p for petrol and 138p for diesel within the next fortnight.
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BROKER RATING CHANGES
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UBS raises Dunelm to 'buy' (neutral) price target 1,410 (1,110) pence
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UBS raises Kingfisher to 'neutral' (sell) price target 340 (201) pence
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COMPANIES - FTSE 100
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REA Group has upped the ante in its pursuit of property portal Rightmove, lifting its bid beyond GBP6 billion. Sydney-listed REA, also a provider of an online property buying portal, said on Monday the new bid values Rightmove's equity at GBP6.1 billion. The offer comprises 341 pence in cash and 0.0422 of a new REA share. Based on REA's closing price on Friday, the bid values each Rightmove share at 770 pence. Rightmove shares fell 3.1% to 674.40 pence each in London on Friday. REA traded 2.0% lower at AUD195.03 each in Sydney on Monday afternoon. Rupert Murdoch's News Corp owns around a 61% stake in REA. REA said the new bid is a 9.2% increase on the initial offer it made earlier in September. Under the terms, Rightmove shareholders will own around 20% of the combined entity. REA noted it is yet to receive any "substantive engagement" from Rightmove yet, however, save for its two prior offers being rejected. REA earlier in September confirmed it was considering a cash and shares bid for Rightmove. A possible of 705p per share was made on September 5. Rightmove labelled that approach "wholly opportunistic" and said it "fundamentally undervalued Rightmove and its future prospects.
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AstraZeneca reported that its and Daiichi Sankyo's datopotamab deruxtecan did not achieve statistical significance in overall survival despite "high-level" results from the Tropion-Breast01 phase 3 clinical trial. The test subjects were patients with inoperable or metastatic hormone receptor-positive, HER2-low or negative breast cancer previously treated with endocrine-based therapy and at least one systemic therapy. The Cambridge-based pharmaceutical company noted that in previous studies, Dato-DXd had met the dual primary endpoint of progression-free surival. Despite the setback, Astra affirmed that evidence remains of "clinical value" for Dato-DXd, and said it will continue discussions with regulatory authorities. On a more positive note Astra said benralizumab, with a brand name of Fasenra, has been recommended for approval in the EU. It has been recommended as an add-on treatment for adult patients with relapsing or refractory eosinophilic granulomatosis with polyangiitis, by the European Medicines Agency's Committee for Medicinal Products for Human Use. The CHMP based its positive opinion on results from the Mandara phase 3 trial in which "nearly 60% of Fasenra-treated patients achieved remission which was comparable to mepolizumab-treated patients" while "41% of Fasenra-treated patients fully tapered off oral corticosteroids". EPGA is a rare, immune-mediated vasculitis that can result in damage to multiple organs. Without treatment, the condition can be fatal.
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COMPANIES - FTSE 250
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WH Smith announced the commencement of its new share buyback programme. The retailer said it has entered into an arrangement with Barclays Bank, allowing the latter to buy back WH Smith shares from Monday until April 15, 2025. The total purchase price under this arrangement will not exceed GBP25.0 million, WH Smith said. The firm earlier in September had announced plans for a GBP50 million share buyback.
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OTHER COMPANIES
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Alphawave IP Group said earnings for its first half were hurt by the timings of specific customer programmes. The London-based high-speed connectivity solution designer said revenue for the first six months of 2024 fell 51% to USD91.0 million from USD187.2 million the year before. Its pretax loss widened to USD49.9 million from USD6.6 million. Licence and non-recurring engineering bookings declined 11% to USD64.8 million. Looking ahead, Alphawave expects revenue between USD310 million and USD330 million for the full year, with USD50 million in adjusted earnings before interest, tax, depreciation, and amortisation. This is revised down from its previously forecast revenue of USD345 million to USD365 million, and adjusted Ebitda of USD70 million. Alphawave said these guidance changes were due to the merger of two of its large AI-focused customers in Korea, which sparked the consolidation of development programmes already in progress as well as the timing of tape-outs in the second half.
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Aterian in its first-half results reported a GBP504,000 pretax loss, narrowed from the prior year's GBP858,000 loss. No revenue was generated, unchanged from the first half of 2023. The Africa-focused mining company said it expects the drilling programme on the HCK project in southern Rwanda, which it entered an earn-in for via a joint venture agreement with Rio Tinto Mining & Exploration last year, to start late in the third quarter.
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By Emma Curzon, Alliance News reporter
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