(Alliance News) - Stocks were called lower in London on Friday morning, following disappointing data from China, and and despite a print which showed that retail sales in the UK performed better than expected in September.
In early corporate news, Pulsar Helium says common shares will commence trading on Friday on the AIM market of the London Stock Exchange, while the chief executive officers of Future and boohoo will step down.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called down 45.2 points, or 0.5%, at 8,347.00
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Hang Seng: up 3.4% at 20,762.87
Nikkei 225: closed up 0.2% at 38,981.75
S&P/ASX 200: closed down 0.9% at 8,283.20
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DJIA: closed up 161.35 points, 0.4%, at 43,239.05
S&P 500: closed down slightly at 5,841.47
Nasdaq Composite: closed up slightly at 18,373.61
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EUR: up at USD1.0845 (USD1.0838)
GBP: up at USD1.3068 (USD1.3014)
USD: down at JPY149.89 (JPY149.94)
Gold: up at USD2,704.40 per ounce (USD2,693.53)
(Brent): up at USD74.55 a barrel (USD74.25)
(changes since previous London equities close)
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ECONOMICS
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Friday's key economic events still to come:
10:00 CEST eurozone current account
11:00 CEST eurozone construction output
08:30 EDT US building permits
12:10 EDT US Federal Reserve Governor Christopher Waller speaks
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Retail sales in the UK performed better than expected in September, data published by the Office for National Statistics showed Friday. Retail sales climbed 0.3% monthly in September, slowed from 1.0% in August but beating FXStreet-cited expectations of a 0.3% contraction. Notably, retail sales rose 3.9% on-year in September, the fastest annual rise since February 2022, and beating growth of around 2.3% in August. September's on-year growth was also comfortably ahead of expectations of a 3.2% climb. Sales volumes were still 0.2% lower than in pre-pandemic February 2020. Further, sales volumes in September were at their highest index levels since July 2022, the ONS noted.
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China posted its slowest growth in a year and a half on Friday as authorities come under pressure to follow up a recent slew of stimulus with more action to reignite the world's number two economy. Beijing's National Bureau of Statistics said the economy expanded 4.6% year-on-year in the third quarter, down from 4.7% in the previous three months and the slowest since early 2023, when China was emerging from its strict zero-Covid policy. However, it was slightly better than the 4.5% predicted by analysts surveyed by AFP. The NBS on Friday acknowledged a "complicated and severe external environment... as well as new problems of domestic economic development", describing China's economic performance in the first three quarters as "generally stable". Still, NBS figures showing a forecast-beating rise in September retail sales – a gauge of consumer activity – provided a ray of light after a string of below-par readings on a range of indicators including inflation, investment and trade. And ahead of the data, state media said the country's top banks had cut interest rates on yuan deposits for the second time this year as part of a move to boost lending. Beijing has said it has "full confidence" in achieving its annual growth goal of 5%, but economists say more direct fiscal stimulus is needed to revive activity and restore business confidence.
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Japanese inflation slowed in September with prices up 2.4% on-year, not including volatile fresh food, official data showed Friday according to AFP. The core Consumer Price Index eased from 2.8% in August as the pace of increase in electricity and gas prices relented, the internal affairs ministry said. Despite the slowdown, the rate remained above the Bank of Japan's 2% target, set over a decade ago as part of efforts to boost the stagnant economy. The target has been surpassed every month since April 2022, although the bank has questioned to what extent that is down to temporary factors such as the Ukraine war. One dollar bought JPY150 on Friday morning after the Japanese currency weakened from levels around 149.35 the day before. Excluding both fresh food and energy, Japanese prices rose 2.1% in September.
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UK Chancellor Rachel Reeves may seek to make around GBP3 billion of cuts to welfare over the next four years by restricting access to sickness benefits, PA reports. Reeves is expected to commit to the previous Tory government's plans to save the sum by reforming work capability rules, according to the Telegraph. Under Conservative proposals, welfare eligibility would have been tightened so that around 400,000 more people who are signed off long-term would be assessed as needing to prepare for employment by 2028/29, reducing the benefits bill by an estimated GBP3 billion. It is understood that Reeves will commit to the plan to save GBP3 billion over four years, but Work & Pensions Secretary Liz Kendall will decide how the system will be changed in order to achieve this. Prime Minister Keir Starmer on Thursday faced a Cabinet backlash over planned spending cuts, with several ministers writing to the Prime Minister directly to express concern about proposals to reduce their departmental spending by as much as 20%.
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BROKER RATING CHANGES
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Goldman Sachs cuts Rentokil Initial price target to 485 (490) pence - 'neutral'
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Peel Hunt cuts Bellway to 'hold' (add) - price target 3,160 (3,020) pence
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Berenberg raises BHP Group price target to 2,000 (1,900) pence - 'hold'
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COMPANIES - FTSE 100
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British American Tobacco notes court-appointed mediator's and monitor's plan of compromise and arrangement in announcement, regarding outstanding tobacco litigation in Canada. In response to the filing of the plan, BAT's Canadian subsidiary, ITCAN, says: "Today marks an important step towards a potential settlement. Since filing for CCAA protection in 2019, ITCAN has been working in good faith under the direction of the mediator to resolve all tobacco litigation in Canada. The plan resolves all Canadian tobacco litigation and provides a full and comprehensive release to Imperial, BAT and all related entities for all tobacco claims. This settlement will be funded by the cash on hand and the cash generated from the future sale of tobacco products in Canada while at the same time maximizing recovery for the creditors. It also allows the Canadian tobacco companies to continue operating as a going concern for the benefit of all stakeholders."
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COMPANIES - FTSE 250
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Future says that Chief Executive Officer Jon Steinberg has informed the board of his decision to step down later next year, having only joined in April 2023. Explains that Steinberg has resigned in order to relocate back to the US with his family. His notice period is twelve months and the board will now launch a search for his successor, the online magazine publisher and owner of price comparison website Go Compare says. Chair Richard Huntingford says: "Whilst we are disappointed that he will be departing next year, we respect Jon's decision to return to the US. The Growth Acceleration Strategy he has implemented is well underway and, as highlighted by the pre-close update announced in September, continues to drive good strategic and financial progress. We will continue to work closely with Jon over the course of his notice period as we look to appoint his successor."
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OTHER COMPANIES
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boohoo says CEO John Lyttle intends to step down, and will support an orderly transition to a new successor. Separately, the fast fashion retailer announces a new GBP222 million debt financing facility, comprised of a GBP125 million revolving credit facility that runs to October 2026, and a GBP97 million term loan that is repayable by August 2025. Further, boohoo says revenue fell 15% to GBP620 million in the six months to August 31, from GBP729 million a year ago. Gross merchandise value was down 7.3% to GBP1.18 billion from GBP1.27 billion. Adjusted earnings before interest, tax, depreciation and amortisation declined 32% to GBP21 million from GBP31 million. The company will publish its half-year results in early November. Looking ahead, the company says: "Whilst performance in the youth brands has remained impacted by the external environment, the group continues to see considerable GMV growth for Debenhams external marketplace, with an additional 5,000 brands signed within the period."
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Pulsar Helium says common shares will commence trading on Friday on the AIM market of the London Stock Exchange. This follows the successful completion of the fundraising of GBP3.9 million, as announced on October 15. Total gross funds raised by the helium project development company, pursuant to the fundraising and the GBP1.1 million pre-IPO cornerstone investment, amount to GBP5 million. The company's common shares will continue to be listed and traded on the TSX Venture Exchange in Canada and the OTCQB Venture Market in the United States.
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By Holly Beveridge, Alliance News senior reporter
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