London’s FTSE 100 traded in the green around midday on Monday amid fresh optimism for a growth boost for the world’s second-largest economy.
The FTSE 100 index traded up 33.66 points, 0.4%, at 8,342.27. The FTSE 250 was down 35.97 points, 0.2%, at 21,023.03, and the AIM All-Share was up 1.82 points, 0.3%, at 740.04.
The Cboe UK 100 was 0.4% higher at 837.61, the Cboe UK 250 was down 0.1% at 18,523.00, and the Cboe Small Companies was up 0.2% at 16,240.20.
In Paris on Monday, the CAC 40 was up 0.5%. The DAX 40 in Frankfurt was 0.1% lower.
China’s top leadership including President Xi Jinping on Monday called for a ‘relaxed monetary policy’ next year, state media reported, as officials gathered in Beijing to discuss plans to boost a shaky economy.
The announcement came too late to boost Shanghai shares, but Hong Kong jumped in the final hour of trading, with the Hang Seng closing up 2.8%.
During a meeting of the ruling Communist Party’s Politburo, China’s top decision making body, officials said that next year they should ‘implement a more active fiscal policy and an appropriately relaxed monetary policy’, official news agency Xinhua said.
Chinese President Xi and other top leaders met Monday to hash out economic plans for 2025.
‘We must vigorously boost consumption, improve investment efficiency, and comprehensively expand domestic demand,’ Xinhua quoted officials as having said.
In London, Rio Tinto added 4.3% as the news supported miners. Asia-focused lender Standard Chartered climbed 2.5%, while luxury goods firm Burberry rose 2.8%. In Paris, LVMH added 2.6%.
Societe Generale analyst Kit Juckes commented: ‘There is far too much going on in the world for a mid-December morning. The first order of the day is the Chinese Politburo’s ’read my lips’ moment, with a clear indication of monetary easing for the first time since 2011 and mentions of ’extraordinary’ counter-cyclical adjustment.
‘This week has four G10 central bank policy decisions: The RBA tomorrow, the Bank of Canada on Wednesday, the SNB and ECB on Thursday. A 25bp ECB cut is almost a done deal and anything else would be a huge surprise. We expect 25bp cuts at each of the next four meetings.’
The pound was quoted higher at $1.2775 early on Monday afternoon, from $1.2748 at the London equities close on Friday. The euro stood at $1.0575, up from $1.0569 at the European equities close on Friday. Against the yen, the dollar was trading higher at JP¥150.41 from JP¥149.83.
There is also a US inflation reading to come on Wednesday. According to consensus cited by FXStreet, annual consumer price inflation is expected to accelerate to 2.7% in November from 2.6% in October.
Back in London, WPP added 3.1% amid a possible M&A move among sector peers. Ad agency Omnicom is in talks for an all-stock buy of Interpublic, the Wall Street Journal reported. The deal would value Interpublic between $13 billion and $14 billion.
‘Investors in WPP seemed to shrug off the prospect of two arch-rivals coming together and creating a force to be reckoned with,’ AJ Bell analyst Dan Coatsworth commented.
‘On one hand, a merger of two companies this size would inevitably involve widespread cost cutting as the first course of action. That could give WPP a window of opportunity to try and poach some clients while its enlarged rival’s management is distracted. On the other hand, a merger would bring together the cream of the crop from both companies which would aid their narrative during account pitches. merger between Omnicom and Interpublic is the latest example of bid talk in the advertising sector. WPP itself has been seen as a bid target, potentially for private equity companies, given its share price has struggled to make progress since the pandemic.’
Elsewhere in London, Angling Direct jumped 9.7%. The fishing tackle and equipment retailer believes ‘the current value of the group’s equity represents an attractive opportunity for deployment of surplus capital’.
‘Since the end of Covid-19 and against a backdrop of continuing uncertainty for omni channel retailers, the group has focused on driving profitable growth and has firmly established itself as a cash generative operation. This has provided the company with a solid platform to enable investment to further grow earnings and the addressable market of the group. The level of cash generation has kept pace with the scale of the investment and the group continues to maintain a robust balance sheet,’ it added.
Gold fetched at $2,656.73 an ounce midday Monday, up from $2,640.10 at the time of the London equities close on Friday. Brent oil rose to $71.91 a barrel from $71.22.
Copyright 2024 Alliance News Ltd. All Rights Reserved.
