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London open: Stocks flat but Rightmove jumps as REA ups bid
London stocks were little changed in early trade on Monday as investors eyed a speech by Chancellor Rachel Reeves, but Rightmove popped higher after REA Group sweetened its takeover offer.
At 0845 BST, the FTSE 100 was flat at 8,226.45.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “It’s been a lacklustre start to the week for the internationally focused FTSE 100, despite extra stimulus for China’s economy. The blue-chip index opened flat following Friday’s falls, as a combination of pessimistic consumers and fears that interest rates may have to stay elevated for longer propelled stocks lower.
“The lack of trading momentum in London comes despite a more positive session for exchanges in China after the central bank lowered a key lending rate, the 14-day reverse Repo rate, by 10bps, in an unexpected move. The 10bps cut is aimed at encouraging banks to lend more freely. While it’s not a major move, it came alongside the news that a press conference will be held by the governor of the People’s Bank of China, focusing on financial support for economic development. Expectations are rising that another cut to interest rates could be on the way, to try to help China achieve its growth targets.”
On home shores, investors were watching out for any headlines from the Labour party conference which is due to kick off later in Liverpool, with Chancellor Rachel Reeves’ speech in focus.
“There is some relief swirling, given early briefings indicate she’ll stress that the UK won’t return to austerity and instead she’ll home in on ways to increase investment in the UK,” Streeter said.
“The government has come under criticism for its dire warnings about the state of the nation’s finances, which appear to have prompted a fresh fall in consumer confidence. The Treasury clearly has its eye firmly on the bond markets, anxious to court investors and not see government borrowing costs pushed up, as punishment for overspending. It’s an understandable caution, given that the UK Chancellor will be speaking on the second anniversary of the disastrous Trussenomics mini-Budget which saw such a bond market strop out, and the Bank of England was eventually forced to intervene.”
On the macro front, the preliminary S&P Global/CIPS manufacturing and services PMIs for September are due at 0930 BST.
In equity markets, Rightmove jumped to the top of the FTSE 100 after Rupert Murdoch’s REA Group took its third tilt at the property portal with an increased offer valuing it at £6.1bn.
REA’s offer is worth 770p per Rightmove share, made up of 341p in cash and 0.0422 new REA shares. The first approach on 5 September of 705p per share, or £5.6bn, was rejected by Rightmove, which said it “fundamentally” undervalued the company. On Friday the offer was sweetened by £300m.
Marks & Spencer was also in the black after an upgrade to ‘buy’ at UBS, but B&M European Value Retail slumped after an initiation at ‘sell’ by the same outfit.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Ck Infrastructure Holdings Limited | +2.11% | +11.40 | 551.40 |
| 2 |  |
Woodside Energy Group Ltd | +1.76% | +22.00 | 1,274.00 |
| 3 |  |
Flutter Entertainment Plc | +1.20% | +205.00 | 17,355.00 |
| 4 |  |
Marks And Spencer Group Plc | +1.19% | +4.40 | 373.90 |
| 5 |  |
South32 Limited | +1.18% | +1.90 | 162.60 |
| 6 |  |
Sse Plc | +0.98% | +19.00 | 1,950.50 |
| 7 |  |
Auto Trader Group Plc | +0.96% | +8.40 | 883.20 |
| 8 |  |
Haleon Plc | +0.95% | +3.70 | 393.10 |
| 9 |  |
Associated British Foods Plc | +0.94% | +21.00 | 2,258.00 |
| 10 |  |
Kingfisher Plc | +0.90% | +2.90 | 325.70 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Wheaton Precious Metals Corp. | -3.88% | -190.00 | 4,710.00 |
| 2 |  |
International Consolidated Airlines Group S.a. | -2.51% | -5.20 | 202.10 |
| 3 |  |
Ferguson Enterprises Inc. | -2.05% | -310.00 | 14,810.00 |
| 4 |  |
Barclays Plc | -1.92% | -4.35 | 222.40 |
| 5 |  |
Banco Santander S.a. | -1.83% | -7.00 | 375.00 |
| 6 |  |
Smith (ds) Plc | -1.62% | -7.60 | 460.80 |
| 7 |  |
Astrazeneca Plc | -1.48% | -174.00 | 11,606.00 |
| 8 |  |
Ashtead Group Plc | -1.17% | -66.00 | 5,560.00 |
| 9 |  |
Aib Group Plc | -1.09% | -5.00 | 455.00 |
| 10 |  |
Natwest Group Plc | -0.80% | -2.70 | 335.00 |
US close: Dow Jones extends post-Fed decision winning streak
Wall Street stocks delivered a mixed performance on Friday following the previous session’s strong rally.
At the close, the Dow Jones Industrial Average was up 0.09% at 42,063.36, while the S&P 500 lost 0.19% to 5,702.55 and the Nasdaq Composite saw out the session 0.36% weaker at 17,948.32.
The Dow closed 38.17 points higher on Friday, modestly extending gains recorded in the previous session as investors cheered the Federal Reserve Bank’s decision to cut its base overnight interest rate by half a percentage point.
In terms of Friday’s headlines, Nike revealed that chief executive John Donahoe had suddenly stood down from the role, while shares in logistics giant FedEx traded lower after it trimmed full-year earnings and revenue guidance.
No major data points were released on Friday.
Monday newspaper round-up: Pubs, petrol prices, passive funds
Fifty pubs a month closed for good across England and Wales in the first half of this year, with experts warning that tax rises in 2025 could make it even harder for some businesses to keep their doors open. Analysis by the real estate intelligence company Altus found that 305 pubs were forced to shut their doors permanently in the first six months of the year, meaning the number of pubs in England and Wales fell to 39,096 at the end of June. – Guardian
The price of petrol and diesel in the UK is falling at the fastest pace this year, with households paying about £4 less to fill up a family car than they did a month ago. Analysis from the RAC found that the average price of a litre of unleaded petrol in the UK was now just above 136.15p, down 7p from the 142.86p recorded last month. Diesel now costs almost 141p a litre, compared with just under 148p a month ago. – Guardian
As many as 4m homes could be built on the green belt under Angela Rayner’s planning revolution, analysis shows. The Housing Secretary’s radical definition of so-called grey belt land could unlock sites for nearly 800,000 new homes across London and the South East alone, according to property data company LandTech. Hotspots in London’s commuter belt include the Tory constituencies of East Surrey and Orpington, which have potential grey belt sites for up to 115,000 and 89,000 homes respectively. – Telegraph
Manchester is growing as a competitive threat to Heathrow on routes to China after the number of seats being flown from the airport to the People’s Republic this winter rose by nearly fourfold. The increase comes as British Airways and Virgin Atlantic have withdrawn services from Heathrow to China. – The Times
Britain’s open-ended fund management industry is growing increasingly passive and at a faster rate than the global average, figures suggest. Just under 30 per cent of open-ended funds domiciled in the UK follow the performance of the stock market rather than trying to beat it, according to estimates from Morningstar Direct, the web-based research platform. That compares with 19 per cent five years ago. Open-ended passive funds are said to make up 24 per cent of the global total, excluding China and India. – The Times
