Stock prices in London suffered at midday on Monday, while the pound rose against the dollar as traders await central bank decisions from the US, the Bank of England and Japan this week.
The FTSE 100 index was down 12.25 points, or 0.2%, at 8,260.84. The FTSE 250 was down 11.24 points, or 0.1%, at 20,884.28, and the AIM All-Share was down 1.70 points, or 0.2%, at 743.53.
The Cboe UK 100 was down 0.1% at 827.02, the Cboe UK 250 was down 0.1% at 18,406.51, and the Cboe Small Companies was up 0.1% at 16,802.26.
‘The key focus for investors this week is the scale of any interest rate cuts by the Federal Reserve. A quarter percentage point would be seen as the Fed starting a ’softly, slowly’ path to easing monetary policy in light of concerns about a weaker jobs market. However, traders are increasingly focused on a bigger cut, with a 59% probability of a half-percentage point reduction at the meeting,’ said AJ Bell’s Russ Mould.
‘A half-percentage point cut would show it is serious about making things easier for consumers and businesses, in the hope they spend more money. However, some investors might take such a move to be a signal that the Fed is really worried about the state of the economy. Therefore, it’s hard to predict with confidence how the market will react if the Fed does push through a half-percentage point cut.’
In European equities on Monday, the CAC 40 in Paris was down 0.1%, while the DAX 40 in Frankfurt was down 0.4%.
The pound was quoted at $1.3199 at midday on Monday in London, compared to $1.3137 at the equities close on Friday. The euro stood at $1.1126, against $1.1084. Against the yen, the dollar was trading at JP¥140.17, down compared to JP¥140.53.
In the FTSE 100, Phoenix Group was down 3.9%.
In the first half of 2024, Phoenix, the London-based insurer and pensions provider, said total income more than doubled to £12.33 billion from £5.80 billion a year prior.
Its pretax loss, however, stretched to £669 million from £372 million.
‘This primarily reflects adverse economic variances which are a consequence of our solvency hedging approach that protects our cash and dividend, as well as elevated non-operating expenses related to our investment programme and the accounting impact of a buy-out of our internal pension scheme,’ the company explained.
Net finance expenses totalled £2.17 billion, rising sharply from £562 million.
Elsewhere in London, TI Fluid surged 13% after it turned down a takeover approach from ABC Technologies.
Noting ‘recent press speculation’, ABC, which makes plastics and lightweighting products for the automotive industry, said two takeover tilts were rejected by TI Fluid.
A 165 pence per share offer for the designer and manufacturer of thermal management and fluid handling systems was fielded in August, before another of 176p earlier in September. The bids valued TI Fluid’s issued share capital at around £816.1 million and £870.5 million, respectively. The 176p bid was a 35% premium to TI Fluid’s share price on August 21, the day before ABC’s first approach.
‘Although the possible offer was also rejected by the board of TI Fluid Systems, ABC Technologies remains interested in a possible transaction and is therefore considering its position,’ ABC commented.
TI Fluid said it is ‘confident in the strategy and prospects of the company’. ABC is majority-owned by investment funds managed by Apollo Management.
TT Electronics tumbled 32%. The electronic component manufacturer reported a weak August after ‘operational efficiency issues in two North American sites’.
It now expects revenue in the second half of 2024 to be ‘£15 million to £20 million lower than previously anticipated’.
‘The drop-through impact of the revenue shortfall and higher production costs are expected to impact the North American operating profit by £13 million to £18 million,’ TT Electronics warned.
Stocks in New York were called predominantly higher. The Dow Jones Industrial Average was called up 0.2%, the S&P 500 index up fractionally, and the Nasdaq Composite down 0.1%.
Donald Trump was the target of an apparent assassination attempt Sunday in Florida, the FBI said, with the Republican presidential candidate’s campaign and law enforcement reporting he was safe and unharmed.
The US Secret Service confirmed one or more of its agents ‘opened fire on a gunman’ located near the boundary of Trump’s golf course, and that an ‘AK-47 style rifle’ with a scope was recovered along with a GoPro video camera.
The Federal Bureau of Investigation said it is ‘investigating what appears to be an attempted assassination of former president Trump.’
Brent oil was quoted at $71.90 a barrel at midday in London on Monday, down from $72.58 late Friday.
‘Crude oil continues to suffer from the Chinese weakness and even the rising bets of a 50 basis point cut from the Fed weren’t enough to send the price of a barrel of US crude above $70pb,’ said Swissquote Bank’s Ipek Ozkardeskaya.
‘Trend and momentum indicators remain comfortably negative, and the RSI index hints that oil is not in the oversold territory just yet, suggesting that we could see a further weakness in oil prices. Strong resistance is seen at $70/72pb range for US crude, and Brent crude – which closed last week at $72pb - could make another attempt below the $70pb mark.’
Gold was quoted at $2,585.10 an ounce, up against $2,578.76.
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