- FTSE 100 closes up 16 points at 7,442
- Direct Line jumps after £520m sale
- Pets at Home, CVS tumble on CMA probe
4:40pm: FTSE 100 closes higher supported by drop in sterling
The FTSE 100 closed in positive territory as a fall in the pound boosted the dollar earners in the index.
At the close, London's lead index was up 15.58 points, 0.2%, at 7,441.72 while the FTSE 250 was down 67.97 points, 0.4%, at 18,383.85.
Chris Beauchamp at online trading platform IG said: "It’s been a choppy week for the FTSE 100, but the key feature has been that the index has been unable to hold on to gains, even it is showing a distinct reluctance to fall below 7400."
"While other markets have held up well over July and August, fears about the UK economy have driven weakness in UK stocks. Andrew Bailey might think the BoE is nearly done with rate hikes, but the market is more worried about a broader economic downturn.”
The pound came under pressure following dovish comments from the Bank of England governor Andrew Bailey, a survey showing business leaders expect growth in pressures to ease and as strong US data boosted the dollar.
There was plenty of company news for investors to get stick into as well.
Direct Line jumped after selling an insurance business for £520 million, but it was not such good news for Synthomer (LSE:SYNT), where a discounted rights issue sent shares tumbling.
Pets at Home and CVS were in the dog house after the UK's competition authority launched a probe into veterinary services.
3:55pm: BAT finally exits Russia
It's atken a while but British American Tobacco says it will sell its last cigarette in Russia within a month, ending its presence in the world’s fourth-largest tobacco market a year and a half after it first pledged to do so in response to the invasion of Ukraine.
The London-based maker of Lucky Strike and Camel cigarettes came under fire in March last year after initially continuing to operate in Russia, breaking ranks with global brands such as Nestlé, Unilever, Coca-Cola and McDonald’s.
The decision was reversed just two days later, with the company citing its “ethos and values”.
More than 18 months after that decision, BAT, which holds 25% of the Russian market, said it had finally reached an agreement to sell its Russian and Belarusian businesses to a group led by its Moscow management team.
3:30pm: Aldi chasing Sainsbury as it unveils store opening programme
Aldi has announced plans for a 50% increase in the number of stores as it unveiled its 1,000th store.
The German discount retailer said it now eventually wants 1,500 stores across Britain, compared to its previous target of 1,200.
Achieving its 1,500-store target would mean more outlets than Sainsbury’s, which is currently the UK’s second-largest grocery chain by market share, has 600 supermarkets and around 800 convenience stores.
More on the story here.
2:50pm: Chinese worries take a bite out of Apple
US markets have opened and the standout is a big fall in tech stocks, with Apple down around 4% after reports China could ban state employees from using iPhones.
Shortly after the opening bell, the Dow Jones Industrial Average was up 25.80 points, 0.1%, at 34,468.99, the S&P 500 was down 27.30 points, 0.6% at 4,438.18 and the Nasdaq Composite was down 198.22 points, 1.4%, at 13,674.25.
The Wall Street Journal reported Wednesday that China had banned government officials from using iPhones for work purposes, while Bloomberg said overnight that Chinese officials could extend that ban to government-backed agencies and state companies.
Shares of Apple opened 3.8% lower at $175.90.
Otherwise, it's another strong reading in the jobs market with weekly jobless claims - a proxy for lay-offs - falling more than expected.
Following on from yesterday's strong services sector data it gives more credence to the possibility of a rate hike at the Federal Reserve's November meeting.
The CME FedWatch tool now puts the probability at close to 5050.
2:07pm: US weekly jobess claims fall
Figures from the US show the US labour market remains relatively robust.
New claims for US employment support fell by more than anticipated in the most recently ended week, figures the US Department of Labor showed.
*US WEEKLY JOBLESS CLAIMS AT 216,000 LAST WEEK; EST. 233,000
*US CONTINUING CLAIMS 1.679M IN AUG. 26 WEEK; EST. 1.719M
*US FINAL 2Q LABOR PRODUCTIVITY RISES 3.5% Q/Q; EST. +3.4% pic.twitter.com/baPTS5ctZw
— Christian Fromhertz ???????? (@cfromhertz) September 7, 2023
Initial jobless claims totalled 216,000 in the week ending September 2, down from the previous week's upwardly revised level of 229,000.
The latest reading came below FXStreet-cited market consensus, which expected the claims figure to increase to 234,000.
1.50pm: Here’s a recap of the top risers and fallers on the market today
Jet2 PLC (AIM:JET2) shares rose 7.2% to 1,100p after it reported excellent trading, with robust demand and pricing combining with a higher package holiday mix to more than offset £13 million of additional costs and lost margin from the air traffic hullabaloo and wildfires in Rhodes.
ANGLE plc, a specialist in liquid biopsies for cancer detection, is showing early signs of progress despite industry headwinds.
The share price, up 12% in early afternoon trade, reflects the progress outlined in the company's interim results statement.
Shares in the polymer group Synthomer (LSE:SYNT) plc lost around a quarter of their value after the company announced a £276 million cash call designed to rapidly reduce its debt pile.
Lords Group Trading PLC (AIM:LORD), the building materials supplier, sank more than 12% after it warned a “challenging backdrop” was expected to lead to falling profits and revenues for the remainder of the 2023 financial year.
1:01pm: RBC upgrade nudges ConvaTec higher
Lunchtime, and the FTSE 100 has shaken off the earlly morning blues to push higher, now up 14 points at 7,440, aided in part by the weakness in the pound.
ConvaTec Group PLC (LSE:CTEC) is heading in the right direction, up 1.3%, lifted by an upgrade by RBC Capital Markets.
The broker has moved the stock to outperform from neutral with an increased price target of 300p, up from 215p.
“Our top-down model indicates that there could be >5% upside to consensus revenue forecasts in 2027E, corresponding to 7.5% upside to EPS,” the broker said.
RBC said its updated forecasts left it 4.1% and 6.0% ahead of consensus on 2027 estimated revenue and EPS respectively.
12:28pm: Growing sense UK rate hike cycle is close to peak
The narrative surrounding UK and US interest rates is diverging as can be seen in the direction of the pound against the greenback.
The perception that UK rates are close to their peak was given further impetus today with a survey showing firms expect price and wage growth to slow.
James Smith, developed markets economist, at ING Economics has reflected on the latest decision maker panel from the Bank of England, which surveys chief financial officers on a
range of topics and continues to point towards lower inflation.
He explained that in the past, the BoE has put a lot of emphasis on the survey, but more recently, it has been visibly wary about putting too much weight on survey data while actual data on inflation and wage growth continues to come in hot.
Nonetheless, Smith said: “With two weeks to go until the next Bank of England rate decision, there’s a growing sense that the rate hike cycle is reaching its peak.”
The survey showed expected price growth over the next year is seen at 4.4% (or 4.9% if you average the last three readings), the lowest since November 2021, with expected wage growth at 5.1% on a three-month moving average, down from 5.2% last month and 6% last December.
“On the face of it, this all provides further ammunition for the Bank of England doves and echoes what we’ve been seeing in other surveys too,” Smith said.
“The bottom line is that the Bank is likely to hike rates by 25 basis points again in two week’s time, but our base case is that this is the last hike in this tightening cycle.”
“Governor Andrew Bailey's indication that we're near the top of the tightening cycle came wrapped with several caveats.”
“But it fits into a broader communication exercise from the Bank that appears to be laying the ground for a pause,” Smith said.
12:00pm: Tech stocks called lower on Wall Street
It's midday, and time to take a look at events across the pound where it looks like a broadly weak start with tech stocks seen lower on concerns interest rates will stay inflated.
In pre-market trading, futures for the Dow Jones Industrial Average were 0.1% higher, while those for the S&P 500 fell 0.3%, and contracts for the Nasdaq 100 futures were down 0.6%.
A strong ISM services sector reading on Thursday pushed Treasury yields and the dollar higher.
The ISM's services PMI registered 54.5 points in August, up from 52.7 points in July, the eighth month of consecutive growth, and above the FXStreet-cited consensus of 52.5 points.
James Knightley chief international economist at ING Economics, noted the figures "surprised to the upside" and while not at very high levels are consistent with US growth accelerating in the third quarter.
"There are doubts as to how sustainable this will be, but the rise in the inflation component will keep hawks wary even if they do indeed go with the majority and vote for a pause on rate hikes in two weeks," he felt.
Today’s economic focus will be on weekly jobless claims as investors look for signs of chinks in the labour market.
Economists expect claims, considered a proxy for lay-offs, to have increased to 234,000 last week from 228,000 the previous week.
Elsewhere, Fed governor Michelle Bowman will appear on a panel on the future of money and consumer protection at the Philadelphia Fed’s annual fintech conference but will no doubt give a comment on two on the current state of the US economy.
Meanwhile, Boeing chief financial officer Brian West will speak at an industrial conference, where investors will be keen to hear about the aerospace and defence group’s return to delivering in China.
11:30am: Pound weakens after Bailey, US services sector strength
One factor behind the FTSE 100's rally is a further fall in terling with the majority in the lead index dollar earners.
The pound has extended its falls after yesterday’s dovish comments from the Bank of England governor, Andrew Bailey, and strong services sector figures in the US.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said Bailey’s comments are “a glimmer of light for UK borrowers”.
“Comments from Andrew Bailey have sent the pound sharply lower, below $1.25 to a level not seen since June.”
“Speaking to MPs, he said the UK is much nearer now to the top of the cycle.“
“So, not only is the Bank of England forecast to go softer on rate hikes going forward, with this month’s expected increase now potentially the last, the bets are that the Fed might step back on the pedal after a brief pause.”
“This marks a considerable reversal of expectations compared to just a few weeks ago, as data has filtered through showing a sharper weakening of business activity in the UK, while in the US the services sector is still pumping.”
The ISM's services PMI registered 54.5 points in August, up from 52.7 points in July.
This was the eighth month of consecutive growth, ISM noted, while the August read came in above FXStreet-cited consensus of 52.5 points.
James Knightley chief international economist at ING Economics, noted the figures "surprised to the upside" and while not at very high levels are consistent with US growth accelerating in the third quarter.
"There are doubts as to how sustainable this will be, but the rise in the inflation component will keep hawks wary even if they do indeed go with the majority and vote for a pause on rate hikes in two weeks," he felt.
11:00am: UK firms expect slower price rises
UK businesses expect to raise their prices at a slower rate over the next 12 months, new data from the Bank of England shows.
The BoE’s latest Decision Maker Panel, out today, shows that businesses expect output price inflation to fall over the next year.
Bank of England puts a lot of weight on the DMP survey and its signalling inflation pressures continue to ease. Year ahead inflation expectations down to 4.9% from 5.4%, anticipated wage settlements broadly unchanged though at 5% https://t.co/imgyKhtOfp
— Jack Barnett (@__JackBarnett) September 7, 2023
Year-ahead output price inflation was expected to be 4.9% in the three months to August, down 0.5 percentage points compared to the three months to July.
The survey of Chief Financial Officers also found that CPI inflation is forecast to be 4.8% in a year’s time, down from the 5.4% expected a month ago.
Firms expect to raise pay by 5%, the same as last month.
10:46am: Eurozone growth revised down
The eurozone economy grew by less than first estimated in the second quarter of 2023, according to official data.
According to Eurostat figures, seasonally adjusted gross domestic product in the single currency area increased 0.1% in the second quarter of 2023 from the first quarter. In the first three months of the year, it had also grown 0.1% from the final quarter of 2022.
Euro area #GDP +0.1% in Q2 2023, +0.5% compared with Q2 2022 https://t.co/n24kQF4rK8 pic.twitter.com/lXNN5qUyBW
— EU_Eurostat (@EU_Eurostat) September 7, 2023
The second quarter reading was revised downwards from an initial estimate of 0.3%.
On an annual basis, seasonally adjusted GDP rose 0.5% in the second quarter, which was downwardly revised from the previous estimate of 0.6%. This follows the 1.1% annual growth seen in the first quarter.
10:32am: Whitbread and Flutter in Morgan Stanley (NYSE:MS)'s top leisure picks
Morgan Stanley (NYSE:MS) has highlighted its top picks in the leisure sector following a review of data trends over the Summer.
The UK listed stocks it favours are Whitbread, Flutter, Compass, SSP, Compass, RyanAir and Wizz Air.
The investment bank noted demand trends are settling down after a period of high turbulence post Covid.
“While this means YoY growth rates are slowing, performance over the summer and Q3 to date is generally tracking stronger than Q2 on a comparable baseline, and stronger than our forecasts,” it noted.
For hotels, RevPAR remains strong across EU/UK/China, and similar in the US in recent weeks, and RevPAR is tracking 200-400bps stronger than Q2 on the same baseline for the hotel stocks MS covers.
For airlines, summer air passenger traffic was solid in Europe and at record levels in the US, and forward capacity plans suggest more passenger growth is expected.
Holiday searches continue to run at /above pre-Covid levels for the tour operators.
Pub & restaurant sales accelerated over June/July (though August likely dipped due to bad weather in Europe), while betting margins look encouraging, the bank said.
“The only real area of weakness is in workplace activity and public transport volumes which were weaker in August, potentially affecting contract caterer,” the bank added.
In hotels, Morgan Stanley (NYSE:MS) likes Accor (luxury transition, cash return potential, non-core disposals) and Whitbread (UK market share gains, German transition to profit, cash return potential, non-core disposals).
In gambling, it like Flutter (US leadership and profit inflection, cash return potential) and Lottomatica (structural market share opportunity from gaming multichannel, cheap valuation).
In catering, MS likes Compass and SSP (both offering strong contract wins, margin upside, buyback potential).
In airlines the bank likes Ryanair (cash return potential) and WizzAir (industry-leading growth at an undemanding multiple).
All these were rated overweight by Morgan Stanley (NYSE:MS) while Carnival was kept at underweight.
10:07am: Upgrades to follow as Melrose lifts guidance
Forecasts at Melrose Industries PLC (LSE:MRO, OTC:MLSPF) are heading upwards as the firm upgraded it full-year guidance on the back of some strong interim results.
It also increased its dividend and said it will be starting its share buyback early, whilst Co-Founder & Chief Executive Simon Peckham will step down in March next year.
"Melrose has delivered a strong set of interims – its first as a pure play aerospace company," Peel Hunt said.
The good news has sent shares to the top of the FTSE 100 leaderboard, up 7.7% at 548.29p.
Looking ahead, Melrose upgraded its annual guidance, it guides for Aerospace adjusted operating profit between £375 million and £385 million, 8% higher than prior guidance. It also forecasts revenue between £3.35 billion and £3.45 billion.
UBS highlighted the strong margin performance with engines margin up to 24.5%, ahead of prior 2023 guidance of 22%.
The Swiss bank noted the strong progress supported earlier-than-planned shareholder returns, by way of a £500 million share buyback, commencing in October for 12 months, with further deleveraging to support ongoing buybacks thereafter.
It expects around 8% upgrades to the financial year 2023 consensus for Aerospace adjusted operating profit given the new guided range.
It appears that this will fall largely in Engines, given strong aftermarket growth, UBS said, but structures should also benefit as progress is made on restructuring/repricing within the portfolio.
It expects a similar upgrade for the year after.
Analysts at Stifel said it was "another excellent set of results, and (another) increase to FY profit guidance", with upside driven by stronger than expected margins at engines.”
9:45am: Pets at Home in the dog house on competition probe
Pets at Home Group PLC (LSE:PETS)'s shares have been rattled after UK competition authorities launched a probe into veterinary services.
The Competition and Markets Authority (CMA) is concerned that the cost of vet services has risen faster than the rate of inflation, and that pet owners may not be given the information they need about prices and treatment options.
Are pet owners being overcharged at the vet?
George Lusty from the Competitions and Markets Authority tells #R4Today it’s launched a review ‘to make sure people can predict' the cost of vet services, as they’re rising faster than other bills.
— BBC Radio 4 Today (@BBCr4today) September 7, 2023
Pets at Home, which leads the British pet services market with a 24% market share, has significant veterinary operations providing both in-clinic and online services in almost two-thirds of its stores.
Shares fell 10.5% to 339p while shares in CVS Group (AIM:CVSG) plunged 33%.
9:20am: Synthomer (LSE:SYNT) tumbles on rights issue, tough trading
Shares in Synthomer (LSE:SYNT) PLC have tumbled nearly 30% after the chemicals outfit unveiled a discounted rights issue to raise £276 million.
The 6 for 1 rights Issue is priced at 197p compared to last night’s closing share price of 60.80p.
Syntomer said the fund raise would reduce borrowings and provide flexibility to deliver strategy and manage balance sheet leverage.
The company said it believes the earnings power of the group is more than double current levels in the medium-term.
The news came alongside interim results which analysts said were in line.
Trading conditions remain tough judging from the firms’ comments;
“Trading in July and August was similar to 1H23, with limited visibility and subdued volumes given challenging macro conditions.”
“The group's outlook for the remainder of 2023 provided in July is reiterated: the board does not anticipate a material recovery in customer demand before the end of the current year,” Synthomer (LSE:SYNT) said.
9:00am: Stocks weaken, Synthomer (LSE:SYNT) plunges
The FTSE remains on the back foot although it has risen from earlier lows, now down 24 points at 7,402.
Top of the fallers is Beazley, following its results while mining stocks Anglo American, Rio Tinto and Glencore are lower following the weak Chinese trade data.
Smurfit Kappa's merger talks with WestRock have seen the shares fall 2.6% but have given a boost to shares in sector peer, Mondi PLC (LSE:MNDI), up 1.9%.
Top of the risers is Melrose Industries which raised its guidance for the year after an almost 20% rise in revenue during the first half.
The group said its adjusted operating profit this year was now expected to be in a range of £375 million to £385 million, an 8% increase on previous forecasts.
ConvaTec Group PLC (LSE:CTEC) rose 1.1% as RBC upgraded to outperform with an increased price target of 300p, up from 215p.
In the FTSE 250, Direct Line remains the star of the show, now up 14%, but Synthomer (LSE:SYNT) has lost nearly a third of its value after a launching a discounted rights issue to raise £276 million.
8:35am: Consortium offloads 25.5 million shares in LSEG
London Stock Exchange Group PLC (LSE:LSEG) shares eased 1.8% after it was revealed a group of investors including US private-equity giant Blackstone, Thomson Reuters (NYSE:TRI), a Canadian pension plan and Singapore’s sovereign wealth fund have offloaded a large chunk of shares they owned in the exchange.
The consortium have sold around 25.5 million shares at a price of 7,950p each compared to the current share price of 8,130p.
The transaction has been made via a placing to institutional investors and a separate offer to retail investors.
LSEG has separately made an off-market purchase of approximately 9.5 million limited-voting ordinary shares.
LSEG is not party to the placing or the retail offer and will not receive any proceeds.
8:18am: FTSE loer but Direct Line jumps after £520 million sale
The FTSE 100 has opened lower taking its cue from the US and Asia and after a survey showed UK house prices fell at their fastest pace since 2009.
At 8:15am, London’s premier index was down 21.82 points, 0.3%, at 7,404.32 while the FTSE 250 was down 77.06 points, 0.4%, at 18,374.76.
Weak trade data from China added to the narrative that economic growth in the world’s second largest economy remains under pressure.
Exports fell 8.8% in August against a year earlier and imports declined 7.3% in another hit for the manufacturing sector of the Chinese economy.
Back in London, and the Halifax UK house prices have fallen at their fastest rate since the aftermath of the financial crisis, according to the Halifax house price index.
The UK’s largest lender reported that the average property price fell by 4.6% on an annual basis in August, down from the record highs seen last summer, the largest year-on-year decrease in house prices since 2009.
Kim Kinnaird, director, Halifax Mortgages, said: “We may now be seeing a greater impact from higher mortgage costs flowing through to house prices.”
But it wasn’t all bad news.
Direct Line Insurance Group PLC (LSE:DLG) jumped 11% after it unveiled the £520 million sale of its brokered commercial insurance business.
The sale is “estimated to increase the group's solvency ratio on a pro forma basis by approximately 45 percentage points,” said Jon Greenwood, acting chief executive.
The insurer has endured a tough year hit by inflationary pressures and rising claims but Josh Warner, market analyst at StoneX thinks it has “started to make tangible progress.”
“The sale of its brokered commercial insurance business will streamline its business and allow it to sharpen its focus while higher prices are also helping margins improve at its key motor insurance business,” he said.
Elsehwere, a potential mega merger is on the cards with news that Smurfit Kappa PLC is in merger talks with US outfit WestRock.
Shares dipped 1.5% on news of the talks, no financial details were disclosed at this stage.
7:55am: Smurfit Kappa in merger talks with WestRock
Smurfit Kappa Group plc (LSE:SKG) is in talks with Atlanta-based WestRock over a potential combination to create Smurfit WestRock, a global leader in sustainable packaging.
The deal, if completed, would create one of the world’s largest paper and packaging companies.
Smurfit, which is listed in London but based in Dublin, said the enlarged company would have its global headquarters in Ireland with US operations remaining in Atlanta.
In the last 12 months, the two group's generated revenue and adjusted Ebitda of approximately $34 billion and $5.5 billion, respectively.
The firms are targeting annual pre-tax run-rate cost synergies in excess of $400 million at the end of the first full year following completion.
Smirfit Kappa said it would combine two highly complementary portfolios to create a global leader in sustainable packaging with unparalleled geographic reach across 42 countries with a significant presence across both Europe and the Americas.
7:48am: UK house prices fall at fastest pace since 2009 says Halifax
Further confirmation that the housing market remains under pressure with a survey from Halifax showing UK house prices have fallen at their fastest rate since the aftermath of the financial crisis.
The UK’s largest lender reported that the average property price fell by 4.6% on an annual basis in August, down from the record highs seen last summer, the largest year-on-year decrease in house prices since 2009.
Instant Info – Halifax UK House Price Index pic.twitter.com/JDa3UJFCcZ
— BuiltPlace (@BuiltPlace) September 7, 2023
On a monthly basis, the average house price fell by 1.9% in August, the largest monthly fall since November 2022.
The price of a typical UK home dropped to £279,569, down by around £14,000 over the last year, back to the level seen in early 2022. It leaves average prices around £40,000 above pre-pandemic levels.
Kim Kinnaird, director, Halifax Mortgages, said: “We may now be seeing a greater impact from higher mortgage costs flowing through to house prices.”
“Market activity levels slowed during August, and while there is always a seasonality effect at this time of year, it also isn’t surprising given the pace of mortgage rate increases over June and July.”
“We do expect further downward pressure on property prices through to the end of this year and into next, in line with previous forecasts,” she said.
7:38am: Currys sales falter but holds guidance
Further evidence that retail space remains under pressure as electricals retailer Currys PLC reported a drop in sales in the 17 weeks to August 26.
Group like-for-like sales fell 4% during the period with UK & Ireland sales down 2%, Nordics sales down 8% and Greece sales up 3%.
Alex Baldock, chief executive said: “Our priorities this year are simple: to keep the UK&I's encouraging momentum going, and to get the Nordics back on track.”
“We're making good progress on both, in what continues to be a challenging economic environment.”
In the UK & Ireland, Currys reported revenue trends were better in July & August than May & June with robust sales in domestic appliances and mobile, offset by weakness in other categories, especially computing.
Gross margin improvements were maintained alongside the delivery of cost saving targets.
Trends in the Nordics improved slightly throughout period, although trading environment remains challenging, the firm said.
Gross margin has improved due to actions taken including higher customer adoption of services.
Despite the sales fall, the firm is holding guidance.
7:27am: Direct Line nets £520 million from sale as losses mount
First out of the blocks is Direct Line Insurance Group PLC (LSE:DLG) which has sold its brokered commercial insurance business lines to Intact Financial (TSX:IFC) Corp for £520 million as it aims to put the firm on “a more stable footing.”
The news came as the FTSE 250-listed insurer unveiled a sharp rise in half-year pre-tax losses to £76.3 million from £11.1 million the year before.
The sale is “estimated to increase the group's solvency ratio on a pro forma basis by approximately 45 percentage points,” said Jon Greenwood, acting chief executive.
The insurer could net a further £30 million dependent on earn-out provisions relating to the financial performance of the business being sold.
Greenwood described the sale price as an “attractive valuation.”
Direct Line estimates the sale will release capital of up to £270 million of which approximately £170 million will be released when the deal is approved.
The company also reported progress in improving margins in its motor division, reporting gross written premium growth of 7%.
“We now believe that we are underwriting profitably, consistent with a 10% net insurance margin,” Greenwood said.
Excluding Motor, the group delivered gross written premium and associated fees growth of 12% and a net insurance margin of 12.2%.
Operating profit in 2023 is expected to continue to be adversely affected by the earn through of previously written Motor business. The outlook for Motor claims inflation remains in line with our assumption of high single digits,
Looking forward, the improved motor margins now being achieved should provide a platform to support an improvement in operating profit into 2024, the firm said.
7:00am: FTSE called lower after US and Asian falls
Welcome to Thursday’s coverage and the FTSE 100 is expected to make a weak start to the day following falls in New York and Asia.
Spread betting companies are calling London’s lead index down 23 points after closing down 11.79 points at 7,426.14 on Wednesday.
US markets weakened after a strong services sector reading, boosted hopes for an economic soft landing, meaning interest rates may stay higher, for longer.
The Dow Jones Industrial Average closed down 0.6%, the S&P 500 fell 0.7% and the Nasdaq Composite eased 1.1%.
Asian markets were also in the red.
China's exports and imports sank again in August, data showed, as the world's second-largest economy struggles with sluggish global demand and a wider slowdown.
However, the pace of contraction slowed from the previous month.
Back in London, and it’s another busy day for corporate news with updates from Beazley, Currys, Melrose, Direct Line, Inspecs and Synthomer (LSE:SYNT).
In company news, paper and packaging firm Smurfit Kappa said late on Wednesday that it is in discussions to merge with US paper company Westroc.
Elsewhere, the Halifax will give its view in the state of the housing market.