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London open: Stocks gain ahead of US CPI; GSK surges on Zantac settlement
London stocks rose in early trade on Thursday, taking their cue from an upbeat session on Wall Street, as investors eyed the latest US inflation reading.
At 0820 BST, the FTSE 100 was up 0.3% at 8,269.93.
Richard Hunter, head of markets at Interactive Investor, said: “Global markets continued to climb the wall of worry, reversing some sharp declines from earlier in the week as investors returned to the fray.
“In the US, the Dow Jones and S&P500 notched new record highs, with buying interest in the technology sector offsetting lingering concerns around the Middle East and more domestically the effects of Hurricane Milton. The likes of Amazon, Super Micro Computer and Apple rallied, although Alphabet finished down by 1.5% on the news that the Department of Justice is weighing up what would be a landmark ruling to force a breakup of the Google business given its market dominance.
“The minutes from the latest Federal Reserve meeting barely caused a ripple, mainly due to economic developments and comments since. Even so, the outsize 0.5% cut was agreed by the majority of the members, without necessarily committing the Fed to further reductions. Indeed, the current indications for a no-change decision in November have risen to around 20%, although at 80% the likelihood of a 0.25% cut remains in the driving seat. Hopes are high that today’s consumer price index will further cement the feeling that the battle against inflation is largely won, with a gain of just 0.1% expected for September, annualised to 2.3%, with core inflation excluding energy and food remaining unchanged at 3.2%.”
The US CPI for September is scheduled for release at 1330 BST.
In corporate news, GSK surged after agreeing to pay $2.2bn to settle about 80,000 Zantac lawsuits in the US.
In a statement released after the close of markets on Wednesday, the pharmaceuticals firm said it had reached an agreement with 10 firms who represent 93% of the Zantac (ranitidine) state court product liability cases pending against it in the US.
GSK also said it had agreed to pay $70m to resolve a whistleblower complaint by a laboratory called Valisure, which alleged that the pharmaceuticals company had defrauded the US government by concealing the cancer risks of heartburn drug Zantac for decades.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “This is a significantly better outcome than initially expected, with some estimates standing at as much as $45bn just a couple of years ago.”
Elsewhere, Tritax Eurobox ralied as Canadian investment firm Brookfield trumped Segro’s effort to buy the warehouse owner with an agreed £557m offer. Brookfield is offering 69p a share, a 6% uplift on Segro’s offer of 65.1p.
Volution Group gained as it posted a 6.1% jump in full-year group revenue and an 8.7% increase in adjusted pre-tax profit.
On the downside, Kingfisher, Tesco, Taylor Wimpey and WPP were all weaker as they traded without entitlement to the dividend.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Gsk Plc | +5.52% | +80.50 | 1,538.50 |
| 2 |  |
Aib Group Plc | +1.92% | +8.00 | 424.50 |
| 3 |  |
Woodside Energy Group Ltd | +1.24% | +16.00 | 1,306.00 |
| 4 |  |
Ck Infrastructure Holdings Limited | +1.04% | +5.50 | 534.50 |
| 5 |  |
Barclays Plc | +1.00% | +2.30 | 232.95 |
| 6 |  |
Informa Plc | +0.96% | +7.80 | 823.80 |
| 7 |  |
South32 Limited | +0.94% | +1.70 | 183.10 |
| 8 |  |
Smith & Nephew Plc | +0.51% | +5.50 | 1,091.50 |
| 9 |  |
Astrazeneca Plc | +0.49% | +58.00 | 11,814.00 |
| 10 |  |
Bp Plc | +0.42% | +1.70 | 408.10 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Ashtead Group Plc | -2.53% | -148.00 | 5,702.00 |
| 2 |  |
Wpp Plc | -2.49% | -19.40 | 758.20 |
| 3 |  |
Kingfisher Plc | -1.93% | -6.10 | 310.00 |
| 4 |  |
Intertek Group Plc | -1.66% | -85.00 | 5,050.00 |
| 5 |  |
Tesco Plc | -1.65% | -6.00 | 358.30 |
| 6 |  |
Antofagasta Plc | -1.63% | -31.00 | 1,865.50 |
| 7 |  |
Anglo American Plc | -1.62% | -37.50 | 2,272.00 |
| 8 |  |
Wise Plc | -1.52% | -10.00 | 648.50 |
| 9 |  |
Diploma Plc | -1.40% | -60.00 | 4,212.00 |
| 10 |  |
Mondi Plc | -1.34% | -19.50 | 1,440.50 |
US close: Dow Jones, S&P 500 close at record highs
Both the Dow Jones and S&P 500 closed at record highs on Wednesday as investors thumbed over minutes from the Federal Reserve’s latest monetary policy meeting.
At the close, the Dow Jones Industrial Average was up 1.03% at 42,512.00, while the S&P 500 advanced 0.71% to 5,792.04 and the Nasdaq Composite saw out the session 0.60% firmer at 18,291.62.
The Dow opened 431.63 points higher on Wednesday, extending gains recorded in the previous session.
Wednesday’s primary focus were minutes from the Federal Reserve Open Markets Committee‘s September meeting, which revealed that a “substantial majority” of policymakers were in favour of slashing interest rates by 50 basis points in its first interest rate cut in four years.
On the macro front, US mortgage applications fell by 5.1% in the week ended 4 October, according to the Mortgage Bankers Association, extending the prior week’s 1.3% drop in taking a bite out of the almost 30% surge in demand throughout September. Applications to refinance a mortgage sank by 9%, while those to purchase a home were broadly unchanged.
Elsewhere, wholesale inventories increased 0.10% month-on-month in August, according to the Census Bureau.
In the corporate space, Alphabet shares were in focus after the Department of Justice said it was looking into a possible forced breakup of search engine giant Google, while shares in aircraft manufacturer Boeing flew lower after strike talks with its workers’ union hit an impasse.
Reporting by Iain Gilbert at Sharecast.com
Thursday newspaper round-up: Workers’ rights, UK productivity, downsizers
Rogue employers will be targeted by a beefed-up new enforcement agency to protect sweeping changes to rights at work for millions of Britons, set to be outlined in a “watershed” bill published on Friday. The Fair Work Agency will be created as part of the government’s employment rights legislation, which will include stronger protections against unfair dismissal and exploitative contracts. – Guardian
Keir Starmer’s promise to end austerity and rebuild public services will require tax increases of £25bn a year in the coming budget even if debt rules are changed to provide scope for extra investment spending, a leading thinktank has said. In its preview of the first Labour budget in 14 years, the Institute for Fiscal Studies said Rachel Reeves would need to raise taxes to fresh record levels to meet the government’s policy goals. The chancellor was also warned of the risk of a Liz Truss-style meltdown if the City responded badly to substantially higher borrowing. – Guardian
An extra 9m staff will be granted powers to sue their employers under sweeping plans by Angela Rayner to overhaul workers’ rights. Under the Deputy Prime Minister’s shake-up, workers will have the right to take companies to court for unfair dismissal from the first day of their employment. Currently, people must be employed for at least two years before they qualify for these powers.Ms Rayner said the changes would benefit 9m people that have been with their employer for less than two years. – Telegraph
Britain’s productivity record over the past two decades has been “dire”, seriously lagging both the United States and Europe, according to a new analysis in the latest assessment of the chancellor’s fiscal options. Growth in output per UK worker has slowed to the lowest pace since at least 1850, the early years of Queen Victoria’s reign, according to Citi, in research published by the Institute for Fiscal Studies as part of its annual green budget. – The Times
One of Britain’s biggest banks has called for downsizers to be allowed to claim back the cost of moving house from the taxman, a concession that it says would help free up 3.8 million homes for growing families. Barclays, the UK’s fifth-largest mortgage lender with a 9.9 per cent market share, has called on the government to incentivise “under-occupiers” to move to smaller homes. – The Times
