The London market was starting the second half of 2023 in a positive mood, after gains by Asian equities earlier Monday and a higher close on Wall Street on Friday.
Focus on Monday was a series of purchasing managers’ index readings, with factory activity in Japan, German and the eurozone all shrinking in June and growth slowing in China.
Trading activity is likely to be limited in the first half of the week ahead, with the New York market closing early on Monday and remaining closed on Tuesday for the US Independence Day holiday.
The FTSE 100 index opened up 18.52 points, 0.3%, at 7,550.05. Having spiked to a record high over 8,000 points in February, the FTSE 100 has since retreated and stands virtually unchanged from where it started the year.
The FTSE 250 was up 72.89 points, 0.4%, at 18,489.65, and the AIM All-Share was up 0.65 point, 0.1%, at 754.16.
The Cboe UK 100 was up 0.2% at 753.09, the Cboe UK 250 was up 0.3% at 16,141.46, and the Cboe Small Companies was up 0.1% at 13,727.97.
In European equities, the CAC 40 in Paris was up 0.2%, while the DAX 40 in Frankfurt was up 0.3%.
Shares in Tesla were up 5.2% in Frankfurt after the US automaker said deliveries in the second quarter beat market estimates.
The electric car maker delivered 466,140 vehicles, an 83% increase year-on-year and above estimates of 450,000.
Tesla’s production is still a long way below that of major car makers such as Toyota, which produced nearly 950,000 vehicles in May alone this year.
In Asia on Monday, markets took their cue from the strong performance on Wall Street, despite some mixed economic data for the region.
The Nikkei 225 index in Tokyo closed up 1.7%, with Toyota up 0.7%.
In China, the Shanghai Composite closed up 1.3%, while the Hang Seng index in Hong Kong was up 2.3%. The S&P/ASX 200 in Sydney closed up 0.6%.
Early economic data pointed towards a slowdown in Asian manufacturing.
The Caixin PMI for China’s manufacturing sector indicated marginal growth in June, albeit at a slower pace than in May. Meanwhile, the au Jibun Bank PMI for Japan showed its manufacturing sector slipped back into a slight contraction. Respondents in Japan noted especially weak demand from mainland China, with exports orders continuing to fall.
The eurozone manufacturing PMI read 43.4 points in June, down from the flash score of 43.6 and May’s reading of 44.8. The reading below 50 points means the sector shrank. In the eurozone’s largest economy, Germany, the PMI score was 40.6 points, down from the flash reading of 41.0 and May’s 43.2.
In the US on Friday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.8%, the S&P 500 up 1.2% and the Nasdaq Composite up 1.5%. Sentiment was lifted by a cooler-than-expected US inflation print, which boosted hopes that the Federal Reserve’s rate-rising spree might be close to an end.
Still, the dollar was firm against other major currencies in early exchanges in Europe on Monday.
Sterling was quoted at $1.2670, lower than $1.2706 at the London equities close on Friday. The euro traded at $1.0880, lower from $1.0916. Against the yen, the dollar was quoted at JP¥144.75, up versus JP¥144.58.
In London, supermarket chain Tesco rose 0.9% as it named Gerry Murphy as its new chair from September 1.
Murphy is currently chair of luxury fashion firm Burberry and food supplier Tate & Lyle, and will step down from his role at the latter to ‘ensure he has sufficient capacity’ for his new role at Tesco.
Murphy was also previously CEO at Kingfisher, and has held non-executive directorships at companies including British American Tobacco and Reckitt Benckiser.
Shares in Tate & Lyle fell 0.5%, while Buberry was trading flat.
Anglo American rose 2.3%, as it announced late on Friday that its diamond business, de Beers, reached an eleventh-hour deal with the Botswanan government. This followed months of tense negotiations that saw the continent’s top producer threatening to cut ties with the storied diamond company.
The Botswana government and Anglo-American, have reached an ‘agreement in principle’, the two sides said in a statement issued late Friday. The agreement provides for a new 10-year agreement to sell the rough diamonds produced by Debswana – a joint venture equally owned by the government and De Beers – and a 25-year extension of its mining licenses.
AstraZeneca fell 5.9% in early trade - the worst large-cap performer - as it announced high-level results from the Tropian-Lung01 phase III trial.
The trial looked at datopotamab deruxtecan, or Dato-DXd, in advanced non-small cell lung cancer. In patients will locally advanced or metastatic NSCLC treated with at last one prior therapy, the treatment showed a ‘statistically significant’ improvement for the dual primary endpoint of progression-free survival compared to docetaxel, the current standard of care chemotherapy.
However, for the dual primary endpoint of overalll survival, the data ‘were not mature’.
‘An early trend was observed in favour of datopotamab deruxtecan versus docetaxel that did not meet the prespecified threshold for statistical significance at this interim analysis,’ AstraZeneca said.
The trial will continue as planned in order to assess OS with greater security.
On AIM, Yourgene Health more than doubled in value, with its shares reaching 0.47 pence from 0.20p on Friday.
The molecular diagnostic group has agreed a cash takeover offer with Novacyt UK, a wholly-owned subsidiary of fellow AIM listing Novacyt. The offer of 0.522p a share values the company at £16.7 million.
Novacyt is a biotechnology group focused on clinical diagnostics. Its shares were up 16%.
‘The acquisition combines highly complementary technologies and services, with the enlarged group able to leverage mutual research and development capabilities for ongoing product development and portfolio enhancement to improve the customer offering,’ the companies said.
Gold was quoted at $1,916.08 an ounce early Monday, higher than $1,915.48 on Friday. Brent oil was trading at $75.28 a barrel, little changed from $75.58
There are more manufacturing PMI readings to come, including the UK at 0930 BST and the US at 1445 BST.
Financial markets in New York close at 1300 local time on Monday for Independence Day. They stay closed on Tuesday for the US public holiday.
Copyright 2023 Alliance News Ltd. All Rights Reserved.
