Stock prices in London opened lower on a busy Monday, as the UK’s gross domestic product climbed by less than previously anticipated in the second quarter of the year.
The FTSE 100 index opened down 13.45 points, or 0.2%, at 8,306.50. The FTSE 250 was down 117.28 points, or 0.6%, at 21,123.28, and the AIM All-Share was up 0.68 points, or 0.1%, at 746.33.
The Cboe UK 100 was down 0.1% at 831.73, the Cboe UK 250 was down 0.4% at 18,616.48, and the Cboe Small Companies was down 1.1% at 16,767.13.
According to data from the Office for National Statistics, the UK’s gross domestic product expanded by 0.5% in the second quarter compared to the first, slower than the ONS’s first estimate of 0.6%. This also was slower than 0.7% in the first quarter.
Year-on-year, UK’s GDP increased by 0.7% in the second quarter, weaker than the FXStreet-cited market consensus, which had anticipated annual economic growth of 0.9%.
In European equities on Monday, the CAC 40 in Paris was down 0.7%, while the DAX 40 in Frankfurt was down 0.3%.
Import prices in Germany were slightly higher in August but the export price growth rate was unchanged, the Federal Statistical Office, or Destatis, reported on Monday morning.
Destatis said that in August import prices rose 0.2% compared to August 2023, but fell 0.4% compared with July. In July, import prices had risen 0.9% on an annual basis.
Destatis said the annual rise in August was mainly due to prices for consumer goods rising by 2.4% annually, with consumer goods imports becoming 2.7% more expensive. Export prices in August rose 0.8% on-year, unchanged from the annual growth rate in July, and were flat on a monthly basis.
Also on Monday, the ifo Institute reported that ‘fewer and fewer companies in Germany are looking to raise their prices’.
The seasonally adjusted ifo price expectations balance dropped to 13.8 points in September from 16.1 points in August, its lowest level since February 2021.
Price expectations in consumer-related sectors of the economy ‘fell noticeably’ to 18.2 points, from 25.0 points in August. They also fell in the construction industry, dropping to minus 0.3 points from 2.3 points. However the manufacturing balance edged up to 6.1 from 5.1 points.
The pound was quoted at $1.3393 early on Monday in London, lower compared to $1.3399 at the equities close on Friday. The euro stood at $1.1174, against $1.1166. Against the yen, the dollar was trading at JP¥142.28, down compared to JP¥142.81.
In London, Vodafone lost 0.1%.
Shareholder approval will no longer be required for its merger of Vodafone UK and Three UK, as the move now classifies as a ‘significant transaction’ under new UK rules. According to the deal, Vodafone will own 51% of the merged UK business, while CK Hutchison will own 49%.
The merged business will be consolidated in Vodafone financial statements, it explained, with initial debt financing provided. The UK merger is however still subject to regulatory approval, and approval from CK Hutchison shareholders.
Additionally, Vodafone’s Italy business sale does not need shareholder approval either under new UK rules. The Italy business sale is expected to have a broadly neutral impact on net assets.
QinetiQ lost 0.7%.
The group has signed an agreement for the sale of its 407 acre freehold site at Cody Technology Park, Farnborough, to a fund managed by Tristan Capital Partners for £112 million.
QinetiQ occupies approximately a third of the space at CTP with the remaining two thirds occupied by 96 other tenants, vacant, or used as common areas. Prior to this transaction, QinetiQ was responsible for the investment and maintenance of the whole site.
Elsewhere, Applied Nutrition, a sports nutrition, health and wellness brand, said it is considering an initial public offering, and intends to publish on Monday a registration document.
The company is considering applying for admission of its ordinary shares to the equity shares category of the official list of the FCA and to trading on the main market of London Stock Exchange.
Chief Executive Officer Thomas Ryder said: ‘We are only scratching the surface of our growth opportunity, and this IPO positions us ideally for the next step of our development. With an exciting new product roadmap and opportunities to grow with new and existing customers, we are confident it will enable us to build the world’s most trusted and innovative sports nutrition, health & wellness brand.’ In 2021, JD Sports Fashion acquired a 32% stake in Applied Nutrition.
JD Sports Fashion lost 1.1% following the news.
In Asia on Monday, the Nikkei 225 index in Tokyo was down 4.8%. In China, the Shanghai Composite was up 8.1%, while the Hang Seng index in Hong Kong was up 2.4%. The S&P/ASX 200 in Sydney closed up 0.7%.
Official data from China on Monday showed that manufacturing contracted for a fifth consecutive month in September.
The purchasing managers’ index – a key barometer of industrial output – stood at 49.8 points, the National Bureau of Statistics announced.
Still, it represented a slight improvement from August’s 49.1 points, and was above the 49.5 forecast in a survey by Bloomberg. A figure above 50 indicates an expansion in manufacturing activity, while anything below that is a contraction.
In the US on Friday, Wall Street ended predominantly lower, with the Dow Jones Industrial Average up 0.3%, but the S&P 500 down 0.1% and the Nasdaq Composite down 0.4%.
Tens of thousands of US dockworkers plan to strike this week if there is no breakthrough on contract talks, just a month before November’s closely contested presidential election.
A walkout affecting 14 large ports on the East and Gulf Coast could start at midnight on Tuesday, posing a potentially significant headwind to the US economy.
Negotiations on a new contract began in May but have stalled in recent weeks.
Elsewhere, rescuers struggled over the weekend with washed-out bridges and debris-strewn roads in the search for survivors of devastating Storm Helene, which killed at least 63 people across five US states and caused massive power outages.
Helene slammed into Florida on Thursday as a Category 4 hurricane and surged north, gradually weakening but leaving in its wake toppled trees, downed power lines and mudslide-wrecked homes.
Brent oil was quoted at $71.97 a barrel early in London on Monday, up from $71.20 late Friday.
Gold was quoted at $2,652.30 an ounce, down a notch against $2,653.93.
Still to come on Monday’s economic calendar, there is a speech from US Federal Reserve Governor Michelle Bowman, followed by Chicago PMI and the Dallas Fed manufacturing index.
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