Stock prices in Europe recovered on Thursday morning, following the Nikkei 225 into the green after a global sell-off sparked by recession fears in the US.
The FTSE 100 index opened up 26.91 points, 0.3%, at 8,035.14. The FTSE 250 was up 129.57 points, 0.6%, at 20,366.31, and the AIM All-Share was up 8.52 points, 1.1%, at 757.14.
The Cboe UK 100 was up 0.4% at 802.13, the Cboe UK 250 was up 0.7% at 17,858.75, and the Cboe Small Companies was up marginally at 16,537.02.
In European equities on Tuesday, the CAC 40 in Paris was up 0.2%, while the DAX 40 in Frankfurt was up 0.7%.
In the US on Monday, Wall Street ended lower, with the Dow Jones Industrial Average down 2.6%, the S&P 500 down 3.0% and the Nasdaq Composite down 3.4%.
‘We’ve caught a brief respite as some falling knives finally hit the floor. A dash of soothing words from Fed officials, particularly Daly, has begun to calm the market’s frayed nerves. However, all eyes remain glued to Tokyo, the epicentre of the carry trade unwind drama, where the effects have been particularly pronounced, stirring up significant turbulence for traders and investors,’ said SPI’s Stephen Innes.
‘The yen, yesterday’s antagonist amid the dramatic selloff, is showing signs of becoming today‘s hero. Its current trajectory suggests a potential stabilizing force within the ongoing market tumult, offering a glimmer of hope for exporters and investors who have endured the storm.’
In Japan on Tuesday, the Nikkei 225 index in Tokyo was up 10%, after closing 12% lower on Monday.
Against the yen, the dollar was trading at JP¥145.50 early Tuesday, up sharply compared to JP¥142.41 late Monday.
The global stock sell-off has fuelled calls for the US Federal Reserve to lower interest rates swiftly and decisively, with some analysts now calling for it to make an emergency cut before its September rate decision.
Fed Chair Jerome Powell signalled last week that the first rate cut could come ‘as soon as’ September.
But some analysts fear that may not be soon enough, as the markets have responded in dramatic fashion to last week’s below-target US jobs report, which raised fears that the US was entering a recession.
The pound was quoted at $1.2740 early on Tuesday in London, down compared to $1.2753 at the equities close on Monday. The euro stood at $1.0927, lower against $1.0946.
The S&P/ASX 200 in Sydney closed up 0.4%.
In Australia, the Reserve Bank of Australia left its benchmark rate unchanged, and warned ‘policy will need to be sufficiently restrictive’ until it has more confidence inflation is waning.
The Australian central bank left the cash rate target unchanged at 4.35% and the interest rate paid on exchange settlement balances unchanged at 4.25%, as expected.
The RBA said although inflation has ebbed ‘substantially’ since its peak 2022, data has proved price pressure is ‘persistent’.
In China, the Shanghai Composite was up 0.2%, while the Hang Seng index in Hong Kong was down 0.2%. The S&P/ASX 200 in Sydney closed up 0.4%.
In the FTSE 100, InterContinental Hotels rose 3.0%.
The company reported that revenue in the first half of the year rose to $2.32 billion, up 4.3% from $2.23 billion. Pretax profit fell 17% to $472 million from $567 million.
InterContinental paid out an interim dividend per share of 53.2 US cents, up 10% annually from 48.3 cents. It said it remains on track to return over $1 billion to shareholders in 2024.
Rightmove lost 5.6%.
Rightmove said that its contract with OpenRent will terminate on September 1, as conditions for OpenRent’s ongoing Rightmove membership could not be agreed.
‘OpenRent is classified as an online lettings agent within Rightmove’s Estate Agency (Lettings) sub-segment and represents approximately 700 branch equivalents, with less than 8% of Rightmove’s lettings listings in July 2024. As has been seen recently, market dynamics - within lettings in particular - are fluid,’ it explained.
Whilst it said it remains confident in its revenue and margin outlook, it warned that the precise mix of membership and average revenue per advertiser may vary.
In the FTSE 250, Keller jumped 11%.
In the first half of the year, the company reported that revenue rose to £1.49 billion form £1.47 billion a year earlier. Pretax profit more than doubled to £95.3 million from £43.1 million.
Keller upped its interim dividend to 16.6p from 13.9p.
Looking ahead, Keller said it anticipates its performance for the full year will be materially ahead of current market expectations.
On London’s AIM, Orchard Funding fell 38%.
It said that its largest customer Nukula, trading as ‘Insure That’ has gone into administration.
At June 30, lending to Insure That’s customers comprised £16.7 million to around 80,000 customers.
‘The company is assessing the impact of the administration of ’Insure That’ on its ability to collect in the lending made by Orchard to Insure That’s customers,’ Orchard said.
Brent oil was quoted at $76.31 a barrel early in London on Tuesday, up from $75.60 late Monday. Gold was quoted at $2,408.10 an ounce, lower against $2,418.90.
Still to come on Tuesday’s economic calendar, there is a UK construction PMI reading at 0930 BST and EU retail sales data half an hour afterwards.
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