Stock prices opened lower on Monday morning in Europe, which has a lot of purchasing managers’ index data out today, while financial markets in the US and Canada remain closed for Labor Day.
In early corporate news, Australia’s REA Group confirmed it is considering making a takeover offer for UK peer Rightmove.
The FTSE 100 index opened down 15.50 points, or 0.2%, at 8,361.13. The FTSE 250 was down 19.12 points, or 0.1%, at 21,067.53, and the AIM All-Share was up just 0.17 points at 772.68.
The Cboe UK 100 was up 0.1% at 838.00, the Cboe UK 250 was down 0.1% at 18,546.91, and the Cboe Small Companies was virtually unchanged at 16,854.88.
According to Commons Leader Lucy Powell, MPs can expect a ‘packed legislative agenda’ on their return.
On the list are bills on renters’ reform and water regulation, though the government is also expected to focus on improving workers’ rights, tightening the rules on MPs’ second jobs, and tackling the root causes of the energy crisis.
Two ‘historic’ bills are expected to be laid before parliament in the first week, one focused on bringing rail operators into public ownership, and another which will establish a fiscal lock to deliver economic stability.
Later in the week, attention will turn across the pond to the latest jobs report from the US, the last before the US Federal Reserve is due to start cutting rates in September.
‘Sufficiently soft data is good for the Fed cut expectations and risk appetite, but a too soft data and jumbo cut expectations are not supportive of risk appetite. There is a very fine line between optimism due to the expectation of rate cuts and chaos due to expectation of rapid rate cuts on thinking that the Fed may have missed its call at the end of the tightening cycle, as it had missed the turn at the start of it,’ explained Swissquote Bank’s Ipek Ozkardeskaya.
In European equities on Monday, the CAC 40 in Paris was down 0.1%, while the DAX 40 in Frankfurt was down just 5.65 points.
The pound was quoted at $1.3141 early on Monday in London, up compared to $1.3132 at the equities close on Friday. The euro stood at $1.1064, against $1.1053. Against the yen, the dollar was trading at JP¥146.16, up compared to JP¥146.12.
Sydney-listed REA Group on Monday confirmed it is considering considering make a cash and shares takeover offer for Rightmove, saying it was responding to ‘press speculation’.
Both REA and Rightmove provide online property buying websites.
REA said it has not yet ‘approached, nor had any discussions with, Rightmove regarding any potential offer’. However, the company said it sees a ‘transformational opportunity’ in the combination of the two companies.
Following the news, Rightmove shares jumped 23%.
Elsewhere on the FTSE 100, LondonMetric lost 0.5%, despite transacting on £70 million of warehouse acquisitions, and £50 million of non-core disposals.
The warehouse acquisitions included a regional logistics centre in Avonmouth, a fully-let urban logistics park in Wednesbury, and five trade warehouses in Leeds, Derby, Swindon, Bolton, and Farnham, while the disposals consisted of ten former LXi REIT assets and a former CTPT asset.
On the FTSE 250, Big Yellow Group also lost 0.5%.
The Bagshot, England-based self storage company has been granted planning permission for a total of 307,000 square feet at two of its London sites, namely Kensington Olympia and Staples Corner.
Consent for the former has been granted at appeal for a 176,000 square foot scheme, which is expected to open in 2027. For the latter, a resolution to grant planning has been secured for a 131,000 square foot replacement of Big Yellow’s existing leasehold store, expected to complete in 2026.
Chief Executive Officer Jim Gibson says: ‘The planning permission at Kensington Olympia is the largest and most important consent secured by Big Yellow to date. It continues our focus on opening stores in central London in highly affluent and populous areas where land availability is low and planning permission is formidably difficult to secure.’
Elsewhere, Artemis Alpha Trust gained 5.2%.
The London-based investment trust, which is focused on the UK, said that heads of terms have been agreed for a proposed combination of its assets with those of Aurora Investment Trust.
Artemis Alpha’s assets will be rolled into Aurora in exchange for the issue of new ordinary shares in Aurora, with a cash exit option for up to 25% of Artemis Alpha’s existing issued capital also available. The scheme is expected to become effective in the fourth quarter of this year, after which Aurora Investment will change its name to Aurora Alpha.
In Asia on Friday, the Nikkei 225 index in Tokyo was up 0.1%. In China, the Shanghai Composite was down 1.1%, while the Hang Seng index in Hong Kong was down 1.8%. The S&P/ASX 200 in Sydney closed up 0.2%.
Chinese manufacturing contracted for a fourth consecutive month in August, official data showed on Saturday, a worse-than-expected result reflecting the world’s second-largest economy’s struggle to rebound.
In August, the purchasing managers’ index stood at 49.1 points, the National Bureau of Statistics announced. Analysts surveyed by Bloomberg had anticipated a decline in August, but a more moderate one at 49.5 points.
However, operating conditions in China’s manufacturing sector picked up a notch in August, S&P Global Data showed. The headline seasonally adjusted purchasing managers’ index rose to 50.4 in August from 49.8 in July. Edging above the 50-points mark separating growth from contraction, it indicates conditions in the manufacturing sector improved in August.
Meanwhile, the Japanese manufacturing sector moved closer to stabilisation in August, data published by S&P Global showed.
The headline au Jibun Bank Japan manufacturing purchasing managers’ index improved to 49.8 in August from 49.1 in July but stayed a notch below the crucial 50-points mark separating growth from contraction.
In the US on Friday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.6%, the S&P 500 up 0.1% and the Nasdaq Composite up 1.1%.
‘Regarding this week’s data, could possibly see stronger-than-expected figures for August, which could further tame the jumbo cut expectations for the Fed and favour the scenario where the Fed would cut its rates by 25 basis points for the three remaining meetings this year,’ said Swissquote’s Ozkardeskaya.
‘A sufficiently strong data could even boost the expectation that the Fed will cut only 2 times this year, by a total of 50 basis points. I believe that there is a greater chance for a hawkish revision in Fed expectations than a dovish one. As such, the US dollar index – which rebounded last week – has room to extend gains this week, if the jobs data looks strong enough.’
The job openings data is due Wednesday, and wages and unemployment figures on Friday.
Brent oil was quoted at $76.52 a barrel early in London on Monday, down from $76.88 late Friday.
Gold was quoted at $2,497.10 an ounce, down against $2,502.92.
Still to come on Monday’s economic calendar, there are manufacturing PMI readings from France, Germany, and the eurozone in the morning, as well from the UK, Switzerland, and Spain.
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