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London open: FTSE gains on China stimulus measures
London stocks rose in early trade on Tuesday, with sentiment boosted after China unveiled new stimulus measures.
At 0825 BST, the FTSE 100 was up 0.5% at 8,299.23.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said easing monetary policy continues to dominate the global narrative.
“Asian markets ripped as China announced a series of easing measures designed to stimulate the world’s second-largest economy,” he said.
“The People’s Bank of China has delved into its bag of tricks to try to get growth back to the 5% target, including cuts to interest rates, mortgage rates, and down-payments for house buyers. This isn’t the central bank going all-in on stimulus, there’s plenty more left in the tank, but It’s a clear sign that it’s not going to sit back and watch growth disappoint.
“Brent oil futures are trading around $74.6 per barrel this morning, recouping losses from previous sessions as traders give supply concerns a slight edge over demand weakness. On the demand side, stimulus from China’s central bank should also act as a small tailwind given the region’s status as the world’s top oil consumer.”
In equity markets, Prudential, Standard Chartered and Burberry – all of which are exposed to China – rallied.
Heavily-weighted miners also gained, with Antofagasta, Rio Tinto and Glencore among the top performers on the FTSE 100 as copper prices advanced.
On the downside, engineering solutions business Smiths Group was under the cosh as its full-year adjusted pre-tax profit missed estimates. The company also announced the acquisitions of two North American companies to bolt on to its HVAC and Flex-Tek businesses for a combined £110m.
Dunelm tumbled after its biggest shareholder, Will Adderley, and his private investment firm WA Capital, sold a 4.9% stake in the homeware retailer in a placing to institutional investors.
Barclays, which acted as sole global co-ordinator, said that WA Capital – which is controlled by Adderley and his wife – sold 10m shares at 1,140p each.
Recruiter SThree also fell as it reported an 8% drop in third-quarter net fees amid continued challenging market conditions.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Anglo American Plc | +6.95% | +147.50 | 2,270.00 |
| 2 |  |
Antofagasta Plc | +5.51% | +100.50 | 1,925.50 |
| 3 |  |
South32 Limited | +5.42% | +8.80 | 171.20 |
| 4 |  |
Glencore Plc | +4.60% | +17.70 | 402.55 |
| 5 |  |
Bhp Group Limited | +4.50% | +92.00 | 2,136.00 |
| 6 |  |
Rio Tinto Plc | +4.46% | +215.50 | 5,045.00 |
| 7 |  |
Prudential Plc | +4.26% | +27.20 | 665.80 |
| 8 |  |
Standard Chartered Plc | +3.86% | +29.20 | 786.60 |
| 9 |  |
Barclays Plc | +2.51% | +5.60 | 228.80 |
| 10 |  |
Banco Santander S.a. | +1.74% | +6.50 | 381.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Smiths Group Plc | -7.75% | -141.00 | 1,679.00 |
| 2 |  |
United Utilities Group Plc | -1.71% | -18.00 | 1,036.50 |
| 3 |  |
London Stock Exchange Group Plc | -1.45% | -150.00 | 10,205.00 |
| 4 |  |
Haleon Plc | -1.39% | -5.50 | 389.90 |
| 5 |  |
Segro Plc | -1.38% | -12.20 | 870.40 |
| 6 |  |
Sse Plc | -1.33% | -26.00 | 1,926.50 |
| 7 |  |
National Grid Plc | -1.15% | -12.00 | 1,032.00 |
| 8 |  |
Unilever Plc | -1.07% | -52.00 | 4,820.00 |
| 9 |  |
Rolls-royce Holdings Plc | -1.06% | -5.60 | 524.60 |
| 10 |  |
Coca-cola Hbc Ag | -1.03% | -28.00 | 2,700.00 |
US close: Stocks extend rate cut-fuelled rally another session
Wall Street stocks closed higher on Monday as the Dow Jones Industrial Average managed to build on its record close yet again.
At the close, the Dow Jones Industrial Average was up 0.15% at 42,124.65, while the S&P 500 advanced 0.28% to 5,718.57 and the Nasdaq Composite saw out the session 0.14% firmer at 17,974.27.
The Dow closed 61.29 points higher on Monday as the blue-chip index narrowly extended its FOMC interest rate decision-fuelled rally into another session.
Monday’s moves followed the Fed’s decision to cut benchmark overnight interest rates by 50 basis points, using its first cut in four years to take investors, who had broadly expected a more restrained 25 basis point cut, largely by surprise.
On the macro front, a preliminary reading of S&P Global‘s US manufacturing purchasing managers index fell to 47 in September, down from 47.9 in August and going against expectations of an increase to 48.5. The services PMI eased to 55.4 in September, down from 55.7 in August but marginally above market forecasts for a reading of 55.3, while the composite PMI edged lower to 54.4, down from 54.6 but ahead of expectations for a print of 54.3,
Elsewhere, Federal Reserve Bank of Atlanta head Raphael Bostic said starting the central bank’s cutting cycle with a large move would help bring interest rates closer to neutral levels as the risks between inflation and employment become more balanced, while Minneapolis Fed boss Neel Kashkari expects policymakers to ease the pace of interest rate cuts going forward.
In the corporate space, chipmaker Qualcomm has reportedly approached Intel about a potential takeover, with the latter’s CEO, Cristiano Amon, said to be involved in the talks.
Tuesday newspaper round-up: Post Office, FCA, pensions watchdog
The Biden administration has proposed new rules that would in effect prohibit Chinese-made vehicles from US roads after a months-long investigation into software and digital connections that could be used to spy on Americans or sabotage the vehicles. The proposed rules come as Chinese automakers become more powerful in global markets, exporting a flood of high-tech vehicles and posing new challenges to western manufacturers, with governments fearing that installed sensors, cameras and software could be used for espionage or other data collection purposes. – Guardian
A lack of proper oversight across the City of London’s network of lawyers, bookkeepers and accountants is hampering efforts to crack down on dirty money being funnelled through the UK, the City watchdog has warned. The latest report by the Financial Conduct Authority (FCA) flagged concerns over the work of the UK’s 25 professional bodies – which oversee the accounting and legal sectors – and found that some were spending as little as £73 a year on anti-money laundering supervision or were outsourcing it entirely to third parties. – Guardian
A Post Office director appointed to champion victims of the Horizon IT scandal has stepped back from the organisation’s board amid an investigation into alleged misconduct. Saf Ismail, a critic of Post Office management, said that he had temporarily given up his non-executive director duties at the scandal-hit service. The investigation emerged as Mr Ismail described a “culture of fear” in the organisation and claimed he had separately been targeted by managers for asking difficult questions. – Telegraph
The chairman of the Financial Conduct Authority did not follow the letter of the rules when he unmasked a whistleblower to senior colleagues, the regulator ruled today, as it revealed that a second whistleblowing complainant had experienced the same treatment. The findings on the conduct of Ashley Alder were made in a report by Richard Lloyd, the senior independent director on the FCA board. – The Times
The pensions watchdog has scrutinised every defined benefit scheme in the country over their exposure to the controversial investment strategy that blew up two years ago, as part of efforts to avoid a repeat of the fiasco. All 5,000 private sector defined benefit schemes and hybrid schemes in the UK were asked 23 questions about their use of leveraged liability driven investment funds (LDI) in a compulsory annual survey of the industry conducted by the Pensions Regulator this year. – The Times
