Stock prices in Europe were higher at Thursday midday, after data showed that annual consumer price inflation in the eurozone decelerated more than expected in September, ahead of the European Central Bank announcing its next interest rate decision, with a cut expected.
The FTSE 100 index was up 26.95 points, 0.3%, at 8,355.94. The FTSE 250 was up 106.07 points, or 0.5%, at 21,085.57, and the AIM All-Share was up 3.50 points, or 0.5%, at 742.93.
The Cboe UK 100 was up 0.3% at 837.00, the Cboe UK 250 was up 0.4% at 18,650.56, and the Cboe Small Companies was down slightly at 17,074.75.
‘There was enough enthusiasm towards shares in industrials, energy producers and financials to stop the FTSE 100 from going into reverse amid the latest disappointment from China and a slump in profit from packaging group Mondi,’ said AJ Bell’s Russ Mould.
‘Investors weren’t impressed by China’s plans to improve its housing market, including a pledge to help builders access funding to finish projects and avoid the country being awash with half-built homes and office blocks. Beijing initially gave the impression it would do whatever it takes to accelerate economic growth in China but market doubts are creeping in. Investors want evidence that its stimulus measures are working and that could be some way off.’
In European equities on Thursday, the CAC 40 in Paris was up 1.3%, while the DAX 40 in Frankfurt was up 0.8%.
The eurozone’s harmonised consumer price index rose by 1.7% in September from a year before, slowing from a 2.2% annual rise in August. The final inflation reading was a notch below the flash estimate of 1.8% that Eurostat had published on October 1.
The data comes just hours before the European Central Bank announces its next interest rate decision.
The ECB is widely expected to follow-up September’s cut with another 25 basis point reduction of the deposit rate, to be announced at 1415 CET, with a press conference with President Christine Lagarde following shortly after.
‘Traders see a 97.7% chance of the European Central Bank cutting rates by a quarter percentage point today, making it the third cut this year as its attention moves from curbing inflation to driving the economy. Economic data from the region has been weak of late, meaning the central bank needs to lower the cost of borrowing to encourage more businesses and consumers to spend. A rate cut today might not be an isolated event as it could take a lot more cuts to regain positive momentum in the economy,’ added AJ Bell’s Mould.
Meanwhile, the eurozone’s international trade surplus contracted to €4.6 billion in August from €4.8 billion a year ago, and was sharply lower than €19.7 billion in July.
The monthly reduction was mostly due to a reduced surplus for machineries and vehicles, to €10.0 billion in August from €17.7 billion in July. Further, there was a shift in the balance for other manufactured goods to minus €3.9 billion in August from plus €100 million in July.
The pound was quoted at $1.3003 at midday on Thursday in London, lower compared to $1.3006 at the equities close on Wednesday.
Private sector landlords in the UK have called on Rachel Reeves to give them new tax breaks to help keep rents down and boost the supply of homes.
In a letter to the chancellor ahead of the budget, representative bodies said their members are facing ‘uncertainty on a number of fronts’ and require stability and clarity to help address the ‘severe shortage of homes’ which has left tenants ‘struggling’.
Analysis by Rightmove showed average advertised rents have hit a record high amid signs landlords are selling up, with 18% of homes for sale being previously available for rent between July and August.
The letter – signed by the National Residential Landlords Association, Propertymark, Goodlord and Large Agents Representation Group – urged the government to reconsider the way the sector is taxed as part of the solution.
The euro stood at $1.0862, lower against $1.0874.
Against the yen, the dollar was trading at JP¥149.60, lower compared to JP¥149.65.
Japanese exports unexpectedly declined on-year for the first time in 10 months, as weaker global demand and a stronger yen hit the country’s manufacturers in September.
Japan’s exports rose 7.2% to JP¥9.038 trillion in September from JP¥8.433 trillion in August, but were 1.7% lower than JP¥9.199 trillion in September 2023.
Japan’s imports climbed 2.1% to JP¥9.332 trillion in September from JP¥9.137 trillion in August, and were 2.1% higher than JP¥9.138 trillion in September 2023.
The country’s trade surplus fell to JP¥294.34 billion, about $1.97 billion, in September from JP¥703.20 billion in August, but was up from JP¥60.56 billion in September 2023.
In September the yen traded at its strongest levels against the dollar for the year to date, briefly hitting JP¥140.8. It has weakened in October after new Prime Minister Shigeru Ishiba questioned the need for further interest rate increases by the Bank of Japan.
In the FTSE 100, Mondi dropped 6.5%.
For three months to September 30, the firm reported underlying earnings before interest, tax, depreciation of €233 million, lower than €351 million the previous quarter.
Mondi this was expected and primarily due to more planned maintenance shuts and a forestry fair value loss. This was in addition to softer seasonal demand and higher input costs.
Looking ahead, Chief Executive Officer Andrew King says: ‘We are making good progress towards completing the paper machine investments at Steti and Duino, both expected to start-up as planned. Overall, our organic growth investments are expected to deliver a meaningful Ebitda contribution from 2025.’
Elsewhere, BHP Group lost 2.8%.
It posted disappointing production for the first three months of its financial year on a quarterly basis, but said annual performance was strong across most of its operations.
The Melbourne-based diversified miner also indicated it was on track to meet its production guidance for the 2025 financial year.
On an annual basis, copper production was up 4.2% at 476,000 tonnes for the first quarter that ended September 30 from 457,000 tonnes in the same quarter a year before. But copper output fell 5.7% from 505,000 tonnes in the fourth quarter to June 30, due to planned maintenance, lower concentrator throughput and production across leaching at Escondida in Chile, and planned lower grades at Spence also in Chile.
For the 2025 financial year, annual copper production is seen between 1.84 million tonnes and 2.04 million tonnes, compared to 1.86 million tonnes a year earlier.
Elsewhere, N Brown surged 42%.
It accepted a takeover offer by Falcon 24 Topco, a company owned by Joshua Alliance. The offer values the clothing and footwear online retailer at around £191 million, with each N Brown shareholder entitled to receive 40 pence per share in cash.
The transaction is expected to close in the first quarter of 2025.
Separately, Selkirk announced its intention to raise £7.5 million through a placing and at the same time seek admission of its shares on the London Stock Exchange’s AIM Market.
Assuming a £7.5 million raise, it expects 20% of the shares will be held by Kelso Ltd, the wholly owned subsidiary of Kelso Group Holdings PLC, the main market listed acquisition vehicle; and 18% of the shares to be held by funds controlled by Belerion Capital Group, where Iain McDonald, proposed executive chair, is the manager.
Stocks in New York were called higher. The Dow Jones Industrial Average was called up slightly, the S&P 500 index up 0.4%, and the Nasdaq Composite up 0.8%.
Kamala Harris pledged a clean break from Joe Biden’s presidency Wednesday in an interview with right-wing Fox News aimed at reaching Republican voters wary of Donald Trump.
Harris clashed with interviewer Bret Baier on hot-button issues including immigration and gender transition surgery, with the Democratic nominee repeatedly asking ‘may I finish’ when the host talked over her answers.
A key moment in the half-hour sit-down came as Harris was being pressed on comments she made last week – that Republicans have seized on – when she said she could not think of anything she would have done differently from Biden during his four years in office.
‘My presidency will not be a continuation of Joe Biden’s presidency,’ said Harris, who became her party’s nominee after the ageing Biden dropped out in July.
Harris said she would bring ‘fresh and new ideas’ and added: ‘I represent a new generation of leadership.
Brent oil was quoted at $74.29 a barrel at midday in London on Thursday, up from $73.83 late Wednesday.
Gold was quoted at $2,687.10 an ounce, higher against $2,673.31.
Still to come on Thursday’s economic calendar, there are initial jobless claims, industrial production, and retail sales, among other prints, from the US.
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