London’s FTSE 100 fell in early trading on Tuesday, underperforming European peers, pegged back by a sharp fall in AstraZeneca shares.
The FTSE 100 index traded down 27.30 points, 0.3%, at 8,243.54. The FTSE 250 was up 57.16 points, 0.3%, at 20,708.04, and the AIM All-Share was down 0.87 of a point, 0.1%, at 747.60.
The Cboe UK 100 was down 0.2% at 824.77, the Cboe UK 250 rose 0.4% at 18,235.85, and the Cboe Small Companies was a touch lower at 16,858.95.
In European equities on Tuesday, the CAC 40 in Paris was up 0.5%, while the DAX 40 in Frankfurt was flat.
In New York on Monday, the Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite each added 1.2%.
‘September may have a reputation for being a tough month for stocks, but Monday didn’t reflect that usual anxiety. Investors seemed relatively unfazed, even optimistic, as they pinned their hopes on the Federal Reserve kicking off an easing cycle. Even with a modest 25-basis-point rate cut, the sentiment was that it could offer some much-needed relief to both consumers and the broader economy. The mood, at least for now, is more ’cautious optimism’ than doom and gloom,’ SPI Asset Management analyst Stephen Innes commented.
‘This week, all eyes are on Wednesday’s consumer inflation print, followed by Thursday’s producer inflation data, which will provide critical clues about pricing pressures before the Fed’s September 18 decision. The hope is that inflation will stay cool enough to keep the 240 basis points of Fed rate cuts baked into the market, offering the economic lifeline needed to keep things afloat.’
Data on Wednesday is expected to show the rate of annual US consumer price inflation faded to 2.6% in August, from 2.9% in July.
The pound was quoted at $1.3099 early Tuesday, little changed from $1.3075 at the time of the London equities close on Monday. The euro traded at $1.1040, flat from $1.1039. Against the yen, the dollar rose to JP¥143.51 from JP¥142.93.
ING analysts commented: ‘FX markets are in consolidative mode ahead of tonight’s TV presidential debate between Kamala Harris and Donald Trump in Philadelphia. The market has seen how a debate like this can make or break a campaign. With the candidates running neck-and-neck in opinion polls, FX markets could be moving this time tomorrow if a clear winner emerges.’
The UK unemployment rate edged lower in the three months to July, but wage growth abated, numbers on Tuesday showed.
According to the Office for National Statistics, the jobless rate faded to 4.1% in the three months to July, from 4.2% in the three months to June. The latest figure landed in line with FXStreet cited consensus.
Wage growth eased. Average earnings excluding bonuses rose 5.1% in the three month, cooling from 5.4% in the three months to June. The figure for July was in line with expectations.
‘Growth was last lower than this in April to June 2022, when it was 4.7%,’ the ONS said.
Annual growth in total earnings, so including bonuses, was 4.0%, a figure the ONS said was skewed by NHS and civil service one-off payments made in June and July of 2023. Growth in earnings including bonuses eased from 4.6% in three months to June.
Analysts at Lloyds Bank summarised: ‘Despite some rogue headlines, there doesn’t look to be much here to justify the MPC away from existing expectations for a relatively gradualist path of rate cuts.’
The latest figure fell short of an FXStreet-cited forecast of a 4.1% rise.
Equities in Asia were largely higher. The Nikkei 225 in Tokyo fell 0.2%. In China, the Shanghai Composite rose 0.3%, while the Hang Seng in Hong Kong was up 0.4%. The S&P/ASX 200 in Sydney rose 0.3% higher.
Shares in Hong Kong-listed Chinese biotechnology companies fell on Tuesday after the US House of Representatives passed a bill aimed at restricting their funding and operations within America, the Financial Times reported.
Among those to decline, WuXi Biologics lost 3.9%.
In London, pharmaceutical firm AstraZeneca shed 5.1%. It said Monday a drug failed to hit a target in key trials for a next-generation lung cancer drug.
Cambridge-based AstraZeneca said datopotamab deruxtecan (Dato-Dxd) failed to reach ‘statistical significance’ for overall survival in patients with metastatic non-small cell lung cancer.
Centamin shot up 25%. It agreed to a cash and shares takeover offer from bigger peer AngloGold Ashanti, in a deal that values Centamin at about £1.9 billion.
Centamin operates the Sukari gold mine in Egypt, while AngloGold mines in Brazil, Democratic Republic of Congo, and Tanzania.
Under the terms of the proposed deal, Centamin shareholders will receive 0.06983 of a new AngloGold share and $0.125 in cash for each Centamin share.
The transaction values Centamin shares at 163 pence, based on the closing price of $28.80 per AngloGold share on Monday. The AngloGold offer represents premium of 37% to the closing price of 119.50p per Centamin share on Monday.
‘This transaction is an endorsement of Centamin’s achievement in re-establishing Sukari as a world-class operation and occurs as the Egyptian government has taken important steps to attract foreign investment to develop the country’s significant geological potential,’ Centamin Chair James Rutherford said.
Elsewhere in London, Capital & Regional lost 9.9%. Suitor Praxis ruled out making an offer for the London-based real estate investment trust.
Praxis, a privately owned property company that specialises in shopping centres in the UK, in July became the third bidder that has shown interest in Capital & Regional this year. Capital & Regional said Praxis made the move on July 5.
NewRiver, another declared suitor, said late in May it had made a proposal to Growthpoint Properties about a potential takeover of Capital & Regional. Growthpoint owns 68% of Capital & Regional.
Vukile Property Fund late in May withdrew its bid to acquire Capital & Regional, for a moment leaving NewRiver as the only declared suitor.
Gold rose to $2,506.91 an ounce early Tuesday, from $2,497.50 late Monday. A barrel of Brent oil climbed to $71.57 from $71.25.
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