- FTSE 100 up 28 points
- Rightmove offer increased
- UK private sector growth slows
3.58pm: Miners lead FTSE 100 higher
Miners topped the FTSE 100’s risers on Monday as the index appeared to be on course for a bright finish the the day’s trading.
By late trading, London’s blue chips had added 28 points to reach 8,258, with Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF), Fresnillo PLC (LSE:FRES) and Antofagasta PLC (LSE:ANTO) among the day’s winners.
This came after gold prices notched up new records throughout the day, peaking at US$2,634 in the afternoon.
DS Smith PLC (LSE:SMDS) sat as the day’s biggest faller in the meantime, down 2%, followed by B&M European Value Retail SA (LSE:BME) and AstraZeneca PLC (LSE:AZN).
Shares in the pharmaceutical firm fell to a five-month low during the day on news of another failed cancer trial of its Dato-DXd drug… Read more
3.46pm: Pound forecast to hit $1.40 in coming year
The pound’s rally against the dollar is expected to continue over the coming months and take sterling as high as US$1.40, according to Goldman Sachs.
Having climbed to its highest level against the greenback since summer 2021, to US$1.33, Goldman predicted the pound could hit the milestone within a year.
This follows the Federal Reserve’s 0.50% reduction to base interest last week, while the Bank of England left its rate unchanged.
Further reluctance by the UK central bank to accelerate base rate cuts, coinciding with aggressive reductions in the US, is expected to buoy the pound.
On Monday, the pound gained 0.2% to reach US$1.3350.
3.28pm: Gold hits latest record
Gold ticked up to yet another record on Monday as purchasing managers index (PMI) data provided the latest boost for the safe haven asset.
Come the afternoon, gold climbed as high as US$2,634 per ounce and above the record set earlier in the day.
The yellow metal had surpassed the US$2,600 mark for the first time last week on the back of the Federal Reserve’s 50 basis point cut to base interest.
Growing tensions in the Middle East since fuelled demand, with the weekend bringing further strikes between Israel and Hezbollah.
S&P Global PMI data on Monday afternoon then dealt the latest boost for gold, with prices rising in the aftermath of the figures which showed US private sector growth had slowed this month... Read more
2.58pm: Dow Jones slips in mixed start on Wall Street as PMI dips
Wall Street faced a mixed start on Monday morning after purchasing managers index (PMI) data from S&P Global showed faster price rises and slower private sector growth in the US this month.
The Dow Jones dipped 15 points early on, while both the Nasdaq and S&P 500 ticked up.
S&P’s PMI reading showed the index had dipped from 54.6 to 54.4 in September, as service sector growth slowed and manufacturing remained in contraction territory for a third consecutive month.
Prices were also said to have risen at their fastest pace in six months, S&P reported, as hopes build for sustained interest rate cuts by the Federal Reserve ahead.
“The early survey indicators for September point to an economy that continues to grow at a solid pace, albeit with a weakened manufacturing sector and intensifying political uncertainty acting as substantial headwinds,” S&P chief business economist Chris Williamson said.
“A reacceleration of inflation is meanwhile also signalled, suggesting the Fed cannot totally shift its focus away from its inflation target as it seeks to sustain the economic upturn.”
2.35pm: Gold eyes record-breaking territory once more
Gold ticked up into Monday afternoon and appeared to be closing in on yet another record.
Come mid-afternoon, the yellow metal regained to sit at US$2,630 an ounce and just US$1 off the record set earlier in the day.
Gold’s latest boost follows the US Federal Reserve’s 0.5% base rate cut last week, alongside growing tensions in the Middle East between Israel and Lebanon-based Hezbollah.
2.29pm: Nationwide to lend up to six times new buyers’ salary
Nationwide Building Society has unveiled plans to lend first-time buyers the equivalent of six times their salaries as lenders grapple to one-up each other’s mortgage offerings.
Lloyds Banking Group PLC (LSE:LLOY)’s Halifax had introduced deals allowing for up to five and a half times household earnings to be borrowed by prospective buyers in late August.
The move to let new buyers borrow up to six times their salaries marks a first for a major lender in the UK, with Nationwide announcing the plan alongside new maximum loan sizes.
Buyers have traditionally been able to borrow around four and a half times their salaries, with Nationwide's increase coming as part of a heated mortgage war between lenders following the Bank of England’s 0.25% cut to base interest last month.
2.05pm: Rolls-Royce set for mini nuclear deals in Sweden, Netherlands
Rolls-Royce Holdings PLC (LSE:RR.) is said to be nearing deals to build mini nuclear reactors in Sweden and The Netherlands.
Having been selected as the preferred supplier of such small modular reactors (SMRs) in the Czech Republic last week, Rolls-Royce is reportedly to be nearing similar deals elsewhere.
According to The Mail on Sunday, Swiss energy firm Vattenfall has shortlisted Rolls-Royce in competition with another company to deploy SMRs in the country.
An exclusive agreement has also reportedly been signed with Dutch firm ULC-Energy, leaving FTSE 100-listed Rolls-Royce just awaiting government approval in both countries... Read more
12.59pm: Health and beauty spending trounces wider retail
Spending on health and beauty products far outdid the wider retail sector last month, figures from Barclays PLC (LSE:BARC) showed on Monday.
Some 7.3% more was spent on such beauty products during the month compared to a year earlier, reflecting the fastest growth since January 2023.
Spending across the wider retail sector ticked up by 0.1% in the meantime, as non-essential purchases climbed 0.7%.
Barclays said a quarter of shoppers signalled cutbacks on the likes of clothing to prioritise beauty spending, with many dubbing such goods as “essential” in line with groceries... Read more
Cosmetics firm Warpaint London PLC (AIM:W7L) was among the FTSE AIM 100's biggest risers on Monday, having climbed by 5.5%.
12.35pm: Dow Jones set to build on record as Wall Street seen higher
Wall Street looked on course for a positive start to the week on Monday following a record closing high for the Dow Jones on Friday.
Futures had the Dow Jones adding 8 points on the opening bell after the index notched up a new record closing value of 42,063 ahead of the weekend.
The S&P 500 and Nasdaq were seen higher too, with respective gains of 6 and 39 points expected.
Last week’s 50-basis point cut to base interest from the Federal Reserve had fuelled gains on Wall Street, prompting the S&P 500 to also hit a record.
Attention turns on Monday to US purchasing managers index data from S&P Global, which is due to be released later in the day.
“Once again, it is the services sector which remains the bright spot, although the strength of this sector also brings major concerns of another inflationary surge,” Scope Markets analyst Joshua Mahony commented.
“Thus, between additional manufacturing-led weakness, or another surge in services inflation, there looks to be plenty of cause for caution when the PMI surveys are released later today.”
This follows August’s reading of 54.6, which saw service sector growth weighed down by a second consecutive decline in manufacturing activity.
12.11pm: Gold holds above $2,600 after fresh record
Gold remained elevated above the US$2,600 per ounce mark come Monday afternoon, having hit yet another record earlier in the day.
By the afternoon, gold sat at US$2,622 and in line with levels seen over the weekend following a rise to a new high of US$2,631 earlier on.
This followed a boost in the wake of the Federal Reserve’s move to cut US interest rates by 0.5% last week, while growing tensions in the Middle East have also buoyed demand as Israel and Lebanon-based Hezbollah continued to exchange blows over the weekend.
FTSE 100-listed Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) sat among the index’s biggest risers on Monday following the precious metal’s latest gain, having climbed by 1.3%.
11.50am: UK private sector still ‘healthy’ despite slowing growth - analysts
Analysts have moved to reassure that a slowdown in UK private sector growth reflects a return to normalised trends rather than a more worrying downturn in the economy.
“While the slight slowdown was across both services and manufacturing, each sector continues to expand at a healthy rate,” EY ITEM Club analysts said following figures from S&P Global earlier in the day.
These had shown the UK purchasing managers index (PMI) fell to 52.9 this month, against 53.8 in August, in part driven by uncertainty ahead of October’s Autumn Budget... Read more
“On balance, the EY ITEM Club expects growth to slow to levels closer to trend growth rates for the remainder of 2024,” analysts added.
Ballinger Group analyst Kyle Chapman noted the figures supported expectations that the UK was on course for a “soft landing” as the Bank of England looks to wind down interest rates.
“Growth is cooling but remains robust, and inflationary pressures are evidently easing,” he said.
“There are plenty of softer price indicators in the report for the Bank of England to take comfort from, with employment growth slowing and growth in end prices falling to a more than three-year low.”
11.20am: Currys soars as Berenberg sees improvement ahead
Currys PLC (LSE:CURY) topped the FTSE 250’s risers on Monday after Berenberg analysts pointed to an improving outlook for the electronics retailer and hiked its share price target.
Shares in Currys sit around 45% below pre-pandemic levels despite the firm’s better financial position and stronger outlook, analysts said in a note.
Pointing to an 8.2x price-to-earnings ratio, Berenberg added Currys was trading on a roughly 40% discount to peers, with “no credit” being given “for earnings upside” ahead.
Currys’ share price target was lifted from 92p to 125p as a result, implying a prospective 60% upside on Friday’s close.
A turnaround plan since 2019 has seen debt reduced by £700 million, analysts highlighted, with further improvements set to see cash flow to equity hit £100 million by 2027.
“This financial discipline, a clear strategy and right-sized cost base, will continue to support normalised capex levels to drive growth,” Berenberg said.
A ‘buy’ rating was reiterated, with shares in Curry jumping 6.3% to 83.35p.
11.03am: Pound at to two-year high versus Euro
PMI readings on Monday morning showing the UK economy was outperforming the Eurozone dealt a boost to the pound sterling, lifting it to a two-year high against the Euro.
Come late morning, the pound was climbed to €1.1967 and its highest level compared to the Euro since August 2022.
Though S&P Global data showed UK private sector growth had slowed between August and September, the 52.9-point reading indicated ongoing economic improvement.
Separate figures covering the Eurozone showed PMI fell to 48.9 in the meantime, indicating business activity had entered contraction territory.
10.53am: Germany, France drag Eurozone into contraction territory
Business activity across the Eurozone has fallen into contraction territory in September for the first time in seven months on the back of German and French economic struggles.
According to the HCOB Flash Eurozone purchasing managers index (PMI), Eurozone private sector growth dipped below 50.0 points this month to 48.9.
This fall below the mark indicates shrinking activity, with the reading reflecting the lowest level in eight months.
Europe’s manufacturing sector weighed on the figure as PMI fell to 44.8, against 45.8 previously, while services dipped from 52.9 to 50.5.
This follows a slump in German economic activity, while an Olympics-related boost to France’s private sector seen in August appeared to wear off.
9.48am: Manufacturing and service sectors weigh on UK business growth
Britain’s manufacturing and service sectors weighed on overall business growth this month, causing a slowdown from August, S&P Global has reported.
Flash purchasing managers index (PMI) figures on Monday showed a reading of 52.9 for September, against the 53.8 seen in August.
This meant an 11-month streak of improving private sector activity continued, but at a slower rate than previously.
S&P reported “fragile client confidence and ongoing inventory cutbacks” weighed on the service and manufacturing sectors, with industry members also pointing to caution ahead of October’s Autumn Budget.
Economist Chris Williamson reassured the PMI figures remained “encouraging” though, with a reading above 50 indicating continued growth.
“A slight cooling of output growth across manufacturing and services in September should not be seen as too concerning, as the survey data are still consistent with the economy growing at a rate approaching 0.3% in the third quarter,” he said.
Business confidence ticked up over the month, he added, while ongoing cooling of service inflation meant further Bank of England rate cuts were still likely this year.
9.18am: Pubs shutting at rate of 50 a month but slower than last year
Some 50 pubs shut for good each month over the first half of this year in England and Wales, figures showed on Monday.
A total of 305 closed their doors for good, leaving a total of 39,096 pubs across England and Wales, real estate intelligence firm Altus reported.
Though this was lower than the average 64 closures seen monthly over the first half of 2023, Altus warned the figures came as the industry braced for tax hikes next year.
Pubs face a “double whammy” of higher costs and reintroduced business rates from next April, Altus property tax president Alex Probyn pointed out, with the tax having been temporarily cut since the pandemic hit in 2020.
According to industry body UKHospitality, this could leave the industry with a £928 million bill as a 75% relief on business rates is lifted.
Probyn added the higher taxes would see pubs paying an average of £12,160 more each next year, threatening to lead to further closures.
8.55am: The morning so far
The new week kicked off with a third offer for Rightmove PLC (LSE:RMV) being tabled by Murdoch’s property website REA Group.
REA’s third approach for Rightmove represents a 9.2% increase from its initial proposal and a 39% premium to Rightmove’s undisturbed share price of 55p on 30 August 2024.
Although Rightmove has rebuffed all previous offers as “wholly opportunistic”, the board today said it will “carefully consider” this latest offer with financial advisers.
Rightmove shares added 3.2% in response to the news, making it the top FTSE 100 mover of the morning.
Weekend reports emerged that Thames Water’s creditors are lining up a £1 billion cash injection by the end of the year to keep the London water supplier afloat.
According to the Sunday Times, the loans would have preferential treatment in the event of a wind up.
This nugget of optimism in the drawn-out Thames Water saga appears to have buoyed listed utilities stocks, with Severn Trent PLC (LSE:SVT) and United Utilities Group PLC (LSE:UU.) adding 0.8% each.
Other top risers include Marks & Spencer Group plc, which is up 1.6%, and B&Q-owner Kingfisher plc, which is up 1.1%.
Speaking of retail, drivers got some good news this morning from RAC, which said that UK fuel prices at UK petrol stations are dropping at the fastest rate seen this year.
As of 19 September, a litre of unleaded was 7p cheaper than the same time in August, as was a litre of diesel.
The FTSE 100 blue-chip index is currently up 17 points to 8,247.
8.25am: Rightmove will ‘carefully consider’ revised offer
Rightmove PLC (LSE:RMV) said it will “carefully consider” the latest unsolicited takeover offer tabled by REA Group.
Rightmove chair Andrew Fisher said: "Rightmove is an exceptional company with a very clear strategy, a consistent track record of delivery and a strong management team.
“The board is confident in the company's short and long term prospects, and sees a long runway for continued shareholder value creation.
"Based on the implied value and structure of REA's first and second indicative non-binding proposals, we considered these proposals to be uncertain, highly opportunistic and unattractive. Accordingly, the board unanimously rejected them.
"The board will continue to act on behalf of our shareholders and respond to the most recent proposal in due course."
8.19am: Stocks largely flat
The FTSE 100 fell a few points in opening Monday exchanges, meaning the blue-chip index is essentially flat from last week’s closing price.
Rightmove PLC (LSE:RMV) is the strongest riser, adding 3.5% following a second revised offer from potential Aussie suitor REA Group.
Among the other top risers, Marks & Spencer Group plc is up 1.5% and Haleon PLC (LSE:HLN, NYSE:HLN) has added nearly a percentage point.
8.13am: Fuel prices approaching lowest level in three years, says RAC
Fuel prices at UK petrol stations are dropping at the fastest rate seen this year, according to the RAC.
As of 19 September, a litre of unleaded was 7p cheaper than the same time in August, as was a litre of diesel.
It marks a sharp contrast to the previous eight months, where fuel costs saw little change despite fluctuations in global oil markets.
The last time prices fell this sharply was between late November and the end of December 2023.
Giving more good news for drivers, RAC fuel spokesperson Simon Williams said more price cuts could be on the way.
“Based on wholesale pump prices, which is what retailers pay to buy the fuel in the first place, we know there’s scope for further price cuts so we very much hope that within the next few weeks we’ll see pump prices reach their lowest levels in three years,” he stated.
Supermarket forecourts offer some of the best petrol prices, according to the RAC Fuel Watch.
Asda and Morrisons win the joint title of the cheapest supermarket at 132.1p per litre on average, followed by J Sainsbury PLC (LSE:SBRY) and Tesco PLC (LSE:TSCO).
7.40am: REA makes third bid for Rightmove
Rightmove PLC (LSE:RMV) has received a second revised offer from Murdoch-owned REA Group valuing the property portal at approximately £6.1 billion.
This marks the third approach made by REA, following an initial proposal on 5 September at 705p per share and a revised offer on 16 September at 749p per share.
Rightmove has rebuffed all previous offers on the grounds that they are “wholly opportunistic”, but has yet to make a statement on this latest offer.
REA’s third approach for Rightmove represents a 9.2% increase from its initial proposal and a 39% premium to Rightmove’s undisturbed share price of 55p on 30 August 2024.
Shareholders of Rightmove would hold approximately 20% of the combined group following the completion of the transaction.
“We are genuinely disappointed at the lack of engagement by Rightmove's board and we strongly encourage the Rightmove board to engage,” REA’s chief executive Owen Wilson sai in making the third approach.
“We believe that the combination of our world-leading expertise and technology with the attractive Rightmove business will create an enhanced experience for agents, buyers and sellers of property.
“We live in a world of intensifying competition and this proposed transaction would bring together two highly complementary digital property businesses for investment and growth.”
Proactive has asked Rightmove for a comment.
7.24am: Thames Water creditors reportedly line up £1bn
Creditors of troubled London water supplier Thames Water are lining up a £1 billion cash injection by the end of the year to keep the company afloat, according to a weekend report from The Sunday Times.
It follows a statement from Thames Water on Friday that it only has cash reserves for another eight months.
Thame Water faces nationalisation if it is unable to repay its more than £15 billion worth of debt on the books.
Creditors are said to be seeking a market-based solution to avoid a forced nationalisation of the utility, which the government has shown little desire to enact.
The Sunday Times said the loans would have preferential treatment in the event of a wind up.
7.11am: Markets gains expected
Stocks are expected to bounce higher when the week’s trading session gets underway today, with FTSE 100 futures pointing to 38 points of gains.
It follows a net negative week in which the blue-chip index lost half a percentage point, or around 43 points.
This morning brings a smattering of macroeconomic releases, including a flash PMI print and the CBI industrial trends readout.
Thames Water will be in focus again, after weekend reports disclosed that the troubled utility’s creditors are plotting £1 billion of emergency funding to keep the London water supplier afloat.