Stock prices in London opened mixed on Tuesday morning, with the FTSE 100 higher but other indices down on a data-heavy day dominated by purchasing managers’ indices.
The FTSE 100 index opened up 15.28 points, or 0.2%, at 8,252.14. The FTSE 250 was down 20.05 points, or 0.1%, at 21,033.14, and the AIM All-Share was down slightly at 740.33.
The Cboe UK 100 was up 0.2% at 826.21, the Cboe UK 250 was down 0.1% at 18,492.12, and the Cboe Small Companies was down slightly at 16,863.12.
UK shop prices moved further into deflation in September, reflecting discounts and fierce competition, a survey showed.
According to figures from the British Retail Consortium, shop price deflation was at 0.6% in September, compared with deflation of 0.3% in the previous month. Shop price annual growth was at its lowest rate since August 2021, the BRC said.
BRC Chief Executive Helen Dickinson said: ‘September was a good month for bargain hunters as big discounts and fierce competition pushed shop prices further into deflation. Shop price inflation is now at its lowest level in over three years, with monthly prices dropping in seven of the last nine months.’
In European equities on Tuesday, the CAC 40 in Paris was down 0.6%, while the DAX 40 in Frankfurt was up 0.2%.
European Central Bank President Christine Lagarde expressed confidence in Brussels that inflation could soon return to the bank’s target level and did not rule out a further interest rate cut.
‘Looking ahead, inflation might temporarily increase in the fourth quarter of this year as previous sharp falls in energy prices drop out of the annual rates, but the latest developments strengthen our confidence that inflation will return to target in a timely manner,’ Lagarde told a European Parliament’s economic and monetary affairs committee.
‘We will take that into account in our next monetary policy meeting in October. The ECB staff projections from September foresee inflation to average 2.5% in 2024, 2.2% in 2025 and 1.9% in 2026,’ she said.
The pound was quoted at $1.3341 early on Tuesday in London, down compared to $1.3397 at the equities close on Monday. The euro stood at $1.1117, lower against $1.1142. Against the yen, the dollar was trading at JP¥144.06, higher compared to JP¥143.31.
In London, Mulberry Group gained 4.8%, after rejecting a possible takeover offer from Frasers Group, at 130p per share. It said it had ‘carefully’ considered the offer, seeking feedback from Challice, its 56% shareholder.
The firm said that the recent appointment of Andrea Baldo as chief executive officer, alongside a capital raising, gives Mulberry ‘a solid platform to execute a turnaround and, ultimately, to deliver best value for all Mulberry shareholders.’
Frasers, which back in 2020 bought a large chunk of shares in Mulberry at 150p each, currently has a 36.8% stake. Its shares lost 0.2% in London at the open following the announcement.
Haleon fell 0.5%.
The firm has agreed to make an off-market purchase of 60.5 million ordinary shares from Pfizer, pursuant to the terms of a share purchase deed entered into by both parties, which was previously approved by Haleon’s shareholders.
The off-market purchase is being made in conjunction with, and subject to the completion of an offering by Pfizer to institutional investors. The purchase price payable by Haleon to Pfizer for the off-market purchase is £3.80 per ordinary share and the total consideration payable will be approximately £230 million.
On completion of the off-market purchase and Pfizer’s offering to institutional investors, Pfizer’s interest in Haleon’s issued ordinary shares with voting rights is expected to reduce from 22.6% to 15.0%. This follows Monday’s news that Pfizer would sell £2.7 billion Haleon shares.
Also on the FTSE 100, AstraZeneca gained 0.6%.
AstraZeneca and Daiichi Sankyo’s supplemental biologics license application for Enhertu has been granted priority review in the US for the treatment of adult patients with unresectable or metastatic HER2-low or HER2-ultralow breast cancer who have received at least one endocrine therapy in the metastatic setting based on the positive results from the DESTINY-Breast06 Phase III trial which compared Enhertu to chemotherapy.
Elsewhere, James Halstead gained 1.4%.
The flooring supplier reported pretax profit for the year ended June 30 of £56.2 million, up 7.9% from £52.1 million a year prior. Revenue, however, fell 9.4% to £274.9 million from £303.6 million.
The firm declared a 6.0 pence final dividend, up 4.3% from 5.75p, making its full-year dividend 8.5p, up 6.3% from 8.0p; and marking James Halstead’s 49th year of dividend increases.
Separately, James Halstead said that Anthony Wild will step down as chair at the December 6 AGM, with CEO Mark Halstead to step up to executive chair. Finance Director Gordon Oliver will step up to CEO, while David Drillingcourt will become finance director.
In Asia on Tuesday, the Nikkei 225 index in Tokyo was up 1.9%. The S&P/ASX 200 in Sydney closed down 0.7%. Chinese markets are closed for National Day.
Japan’s manufacturing sector continued to be in decline in September, while the country’s unemployment rate fell in August, data showed Tuesday.
The headline au Jibun Bank manufacturing purchasing managers’ index edged down to 49.7 points in September from 49.8 in August, S&P Global reported.
The figures came as Japanese government data showed that the country’s unemployment rate improved to 2.5% in August from 2.7% in July. This was lower than the FXStreet-cited consensus, which had expected 2.6%.
Separately, a key quarterly survey of Japanese businesses showed on Tuesday no significant change in confidence levels among the country’s biggest manufacturers, while large non-manufacturers were slightly more upbeat.
The Bank of Japan’s Tankan survey reports the difference between the percentage of firms who see current business conditions as favourable, and those that do not.
Tuesday’s headline reading among large manufacturers was plus 13, unchanged from three months earlier. It beat market expectations of plus 12 and followed a modest uptick in the previous quarter to 13 from 11.
In the US on Monday, Wall Street ended higher, with the Dow Jones Industrial Average up slightly, the S&P 500 up 0.4% and the Nasdaq Composite also up 0.4%.
The US is set to see inflation cool further towards policymakers’ target, Federal Reserve Chair Jerome Powell said, with interest rates likely to come down over time too.
‘Disinflation has been broad based, and recent data indicate further progress toward a sustained return to two percent,’ Powell said, according to prepared remarks of a speech he is set to deliver at the National Association for Business Economics annual meeting in Tennessee.
In particular, Powell noted that prices of goods – excluding volatile food and energy categories – have fallen while supply bottlenecks have eased. With the growth rate in rents charged to new tenants remaining low, he added, housing services inflation will likely continue to decline.
He also signalled that further rate cuts are in the pipes, if there are no major surprises. ‘Looking forward, if the economy evolves broadly as expected, policy will move over time toward a more neutral stance,’ Powell said.
Brent oil was quoted at $71.11 a barrel early in London on Tuesday, down from $72.30 late Monday.
Gold was quoted at $2,642.30 an ounce, higher against $2,633.76.
Still to come on Tuesday’s economic calendar, there is manufacturing PMI from the UK, while such data was just released from the eurozone, Germany, and France. Later in the day, there is the Redbook index, more manufacturing PMIs, and the Dallas Fed service index from the US.
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