Stock prices in Europe were in the green at midday on Tuesday, while medical device developer Belluscura surged on London’s AIM market after anticipating a revenue jump.
The FTSE 100 index was up 9.28 points, or 0.1%, at 8,337.06. The FTSE 250 was down 21.43 points, or 0.1%, at 21,168.05, and the AIM All-Share was up 1.56 points, or 0.2%, at 779.25.
The Cboe UK 100 was up 0.1% at 833.82, the Cboe UK 250 was down 0.3% at 18,615.14, and the Cboe Small Companies was down 0.2% at 17,031.61.
‘The FTSE 100 got off to a strong post-Bank Holiday start, lifted by its healthy contingent of resources companies,’ said AJ Bell’s Russ Mould.
‘This week is likely to be dominated by Nvidia results and a second estimate of US second-quarter GDP. Federal Reserve chair Jerome Powell’s virtual confirmation there will be a rate cut at the next meeting in September means the debate now is whether it will be a 25-basis point or 50-basis point cut.’
In local economic news, during the first week of August, UK shop prices decreased 0.3% year-on-year, below the three-month average no change and compared with July’s annual inflation of 0.2%.
Non-food prices showed 1.5% deflation in August, compared with 0.9% deflation in July and leaving inflation ‘at its lowest rate since July 2021’.
Meanwhile, in politics, Prime Minister Keir Starmer is set to give a speech in Downing Street on Tuesday, telling Britons that ‘things will get worse’ before they improve.
Starmer will promise to do the ‘hard work’ to ‘root out 14 years of rot’ under the Conservatives, PA reported. However, he is also expected to use his speech to warn that ‘frankly – things will get worse before we get better’ as the Labour administration tries to deal with ‘not just an economic black hole but a societal black hole’.
Chancellor Rachel Reeves is expected to raise taxes in her budget on October 30 after accusing the Tories of leaving a £22 billion shortfall in the public finances.
In European equities on Tuesday, the CAC 40 in Paris was up 0.1%, while the DAX 40 in Frankfurt was up 0.2%.
According to the Federal Statistical Office, Germany’s gross domestic product fell by 0.1% in the second quarter from the first quarter. The reading was unchanged from the estimate provided at the end of July.
GDP was unchanged from a year before, however. This represented an upward revision from a previously reported 0.1% annual decline, which also was the market expectation.
Meanwhile, separate data showed that German consumers are feeling more pessimistic heading into September, as concerns about jobs and wages add to a gloomy outlook for Europe’s largest economy.
The survey of around 2,000 people showed that consumer morale ‘suffered a severe setback’ compared to a month earlier, according to pollsters GfK and the Nuremberg Institute for Market Decisions.
The forward-looking indicator fell by 3.4 points to minus 22 points for September, they said in a statement.
The pound was quoted at $1.3227 at midday on Tuesday in London, higher than $1.3220 at the equities close on Friday. The euro stood at $1.1168, down against $1.1193. Against the yen, the dollar was trading at JP¥144.72, down compared to JP¥144.80.
In the FTSE 100, resources BP and Shell gained 1.6% and 0.7% respectively.
Meanwhile, Bunzl jumped 7.5%.
The firm reported pretax profit for the six months ended June 30 of £279.4 million, down from £317.1 million a year prior. Adjusted operating profit before income tax was £408.7 million, up from £395.6 million.
Revenue came to £5.71 billion, down from £5.91 billion the year previously. However, the firm raised its interim dividend to 20.1 pence from 18.2p year-on-year.
Looking ahead, Bunzl now expects adjusted operating profit in 2024 to show a ‘strong increase’ in comparison with 2023, mainly driven ‘by an increase in...group operating margin’.
Bunzl also announced a 3-year capital allocation commitment of around £700 million per year. Further, the company said it starts a share buyback programme of up to £250 million today, to be completed by March 3 at latest.
In the FTSE 250, Harbour Energy gained 6.8%.
It now expects to complete the acquisition of the Wintershall Dea asset portfolio in early September, compared to a previous timeline of early in the fourth quarter. This follows ‘considerable progress’ made on satisfying the conditions to completion, including the recent receipt of Mexico regulatory consents, the firm explained.
On AIM, Belluscura jumped 52%.
The London-based medical device developer’s shares jumped, as it set full-year revenue expectations between $8 million and $10 million, up substantially from $825,409 a year prior.
This guidance was set amid record sales for the month of July, with revenue of $708,000, and ahead of the full commercial launch of Discov-R, a portable oxygen concentrator.
Meanwhile, Allergy Therapeutics fell 14%.
The Sussex, England-based biotechnology company’s shares fell on Tuesday, despite securing an additional £5 million in loans, extending its cash runway. Major shareholders SkyGem Acquisition Ltd and Southern Fox Investments Ltd have agreed to provide a further £5 million from an existing loan facility.
The facility was first announced in December last year. Allergy Therapeutics said it now has extended its cash runway into late September. It noted that there remains a further £12.5 million of uncommitted funding available under the amended loan facility.
Stocks in New York were called mainly higher. The Dow Jones Industrial Average was called just about lower, the S&P 500 index was up fractionally, and the Nasdaq Composite was up 0.1%.
US National Security Advisor Jake Sullivan arrived in Beijing Tuesday to meet top diplomat Wang Yi for tense talks, as China found itself embroiled in fresh security rows with key American allies Japan and the Philippines.
On Monday, US treaty ally Japan scrambled fighters after a Chinese military aircraft’s incursion into its airspace, which Tokyo called a ‘serious violation’ of its sovereignty.
And the Philippine defence chief on Tuesday accused Beijing of being the ‘biggest disruptor’ of peace in Southeast Asia following a week of confrontations between the two countries’ ships near a flashpoint disputed shoal in the South China Sea.
Ahead of Sullivan’s trip – the first by a US national security advisor to China since 2016 – an American official had said he would discuss the South China Sea with counterparts in Beijing, including foreign minister Wang. She did not indicate that the US expected breakthroughs on the trip.
‘We are committed to making the investments, strengthening our alliances, and taking the common steps on tech and national security that we need to take,’ the official said, referring to sweeping restrictions on US technology transfers to China imposed under President Joe Biden.
Gold was quoted at $2,508.30 an ounce on Tuesday, lower than $2,515.73 on Friday.
Brent oil was trading at $80.91 a barrel, higher than $78.88 late Friday.
‘...heightened tensions between Israel and Lebanese militant group Hezbollah, along with outages in Libya, saw oil prices surge back above $80 per barrel. Commodities traders will be watching closely to see if the apparent step back from the brink by both parties holds for now,’ said AJ Bell’s Mould.
Still to come on Tuesday’s economic calendar, there is a handful of data from the US, including consumer confidence data.
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