(Corrects to clarify that Croda did not change its outlook.)
(Alliance News) - The FTSE 100 was in the green on Monday morning of an extremely quiet data schedule, and as economists consider how close their nation is to Donald Trump's good books.
XTB's Katherine Brooks commented that "we may see some differentiation in the performance on global stocks as we get more information about Trump's tariffs plans...the UK could enjoy a better regime under the Trump administration than other parts of the world. Thus, we could see some outperformance of the FTSE 100 [versus] other European indices at the start of the new week. Both the Eurostoxx 50 index and the FTSE 100 fell last week, although European futures are pointing to a positive open on Monday.
"While a favourable tariff regime for the UK is something to celebrate, upside for UK stocks could be limited by news that some of the biggest UK retailers, including Tesco and Sainsbury's may have to raise prices due to the impact of the national insurance increase for employers in the budget. Thus, the prospect of rising prices could limit any upside for UK stocks at the start of this week."
In corporate news, Aquis Exchange has agreed to a takeover offer from Switzerland's Six Group while Resolute Mining's chief executive officer and two other employees were detained in Mali over the weekend.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.7% at 8,128.98
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Hang Seng: down 1.8% at 20,365.47
Nikkei 225: up 0.1% at 39,533.32
S&P/ASX 200: down 0.4% at 8,266.20
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DJIA: closed up 259.65 points, 0.6%, at 43,988.99
S&P 500: closed up 0.4% at 5,995.54
Nasdaq Composite: closed up 0.1% at 19,286.78
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EUR: down at USD1.0702 (USD1.0731)
GBP: down at USD1.2902 (USD1.2926)
USD: up at JPY153.45 (JPY152.62)
Gold: down at USD2,672.54 per ounce (USD2,685.63)
(Brent): up at USD73.81 a barrel (USD73.58)
(changes since previous London equities close)
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ECONOMICS
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Monday's key economic events still to come:
Canada Remembrance Day. Bond market closed.
12:00 IST Ireland industrial production
US Veterans Day. Bond market closed.
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Donald Trump's return to the White House could put the independence of the US Federal Reserve under strain, potentially weakening its ability to fight against inflation and unemployment free from political interference. The Fed has a dual mandate from Congress to act independently to tackle both inflation and unemployment – primarily by raising and lowering interest rates. Anything that undermines the Fed's independence could spook traders in the financial markets, who might come to question if it could effectively tackle inflation. "The prevailing view for the past 30 years, with the exception of the first Trump administration, has been that it's best to give the Fed the widest possible latitude to conduct monetary policy," David Wilcox, a senior fellow at the Peterson Institute for International Economics, or PIIE, told AFP. "Monetary policy is complicated enough even without having to take that additional consideration," added Wilcox, a former senior advisor to three Fed chairs who is also Bloomberg's director of US economic research.
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Days before Senate Republicans pick their new leader, Donald Trump is pressuring the candidates to change the rules and empower him to appoint some nominees without a Senate vote. Republican Senators John Thune of South Dakota, John Cornyn of Texas and Rick Scott of Florida are running in a secret ballot election on Wednesday to lead the conference and replace longtime leader Mitch McConnell, who is stepping aside from the job after almost two decades. All three have courted Trump's support in the race, vying to show who is the closest to the president-elect as they campaign to become majority leader. Trump has not endorsed in the race, but on Sunday he made clear that he expects the new leader to go around regular Senate order, if necessary, to allow him to fill his Cabinet quickly. In a statement on X and Truth Social, Trump said that the next leader "must agree" to allow him to make appointments when the chamber is on recess, bypassing a confirmation vote.
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China's consumer inflation rate slowed in October, official data showed Saturday, in a sign that demand remains sluggish in the world's number two economy. The slowdown comes as authorities have been seeking to boost domestic activity as a property crisis weighs on confidence. The consumer price index, a key measure of inflation, rose 0.3% year-on-year in October, down from 0.4% in September, the National Bureau of Statistics said. The latest figure came in below the 0.4% forecast in a Bloomberg survey of economists. The data was released after Chinese lawmakers on Friday unveiled a sweeping plan to lift local government debt and boost spending. Producer prices also slid 2.9% year-on-year in October, compared to a decrease of 2.8% in September, the NBS said on Saturday. This extends a deflationary run that began in late 2022. Beijing began to unveil a raft of measures in September aimed at boosting economic activity, including rate cuts and the easing of some home purchasing restrictions.
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Japanese Prime Minister Shigeru Ishiba was on Monday pitted against the main opposition chief as parliament votes to appoint the nation's leader. Ishiba, 67, is expected to keep his job, but with a fragile grip on power after his ruling coalition lost its majority in a snap election last month. Ishiba is expected to lead a minority government after a run-off – the first since 1994 – with Yoshihiko Noda of the Constitutional Democratic Party of Japan. "In order to stay in power, Ishiba needs to pass the government budget this winter. It will mean the LDP will have to concede some of its policies to seek cooperation from others," Tomoaki Iwai, professor emeritus at Nihon University, told AFP. To have enough sway to pass legislation going forward, the ruling bloc has asked for help from the Democratic Party for the People (DPP), a small centrist group. The DPP has agreed to cooperate on a vote-by-vote basis while staying out of the coalition. In talks with the LDP, it has demanded tax cuts and ENERGY subsidies that economists say would slash the government's revenues. Ishiba has also renewed a pledge to build up his country's military and deepen its alliance with the US under Trump.
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Certain world leaders have reportedly spoken with Trump over the last few days, including current US President Joe Biden, Israeli Prime Minister Benjamin Netanyahu on the "Iranian threat" to Israeli security, and German Chancellor Olaf Scholz whose office said the two "agreed to work together towards a return to peace in Europe". Trump has also spoken to Russian leader Vladimir Putin and urged him not to escalate the war in Ukraine, The Washington Post reported. The Post, citing several anonymous sources familiar with the call, reported that Trump had reminded Putin of America's sizeable military presence in Europe.
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Keir Starmer is expected to discuss Ukraine and the conflict in the Middle East when he meets Emmanuel Macron in Paris. Ahead of the commemorations, he will hold a bilateral meeting with the French president. Foreign policy issues are thought to be among the topics they will discuss, including the war in Ukraine and the humanitarian situation in Gaza. On Sunday, Chief Secretary to the Treasury Darren Jones told Sky News: "We're going to continue to work with the Biden administration until the inauguration on current American policy bases that aligns with our position in the UK, where we want to support Ukraine, that our support for Ukraine is resolute...That's why we're offering them GBP3 billion a year, which you know, in the fiscal context here in the UK, is difficult but the right decision for us." Mr Jones added: "Officials will be considering and planning lots of different scenarios – as they would do under any administration – to make sure that the UK is in the strongest possible position."
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BROKER RATING CHANGES
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Deutsche Bank Research cuts Vistry price target to 1,100 (1,180) pence - 'buy'
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HSBC starts Renishaw with 'hold' - price target 3,350 pence
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UBS raises Ryanair to 'buy' (neutral) - price target 23.15 (17.25) EUR
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COMPANIES - FTSE 100
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Croda said its third quarter sales have risen on-year to GBP407 million from GBP387 million. Its full-year outlook remained unchanged, with the firm still eyeing an adjusted pretax profit of between GBP260 million and GBP280 million at constant exchange rates. It expects an approximate GBP14 million adverse impact of currency translation on full-year reported pretax profit. Croda said the sterling strengthened further during the third quarter, and that the sales rise reflects ongoing momentum in its Fragrances & Flavours business.
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COMPANIES - FTSE 250
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Direct Line has said it is in the "early stages of a significant turnaround", but that its third-quarter results will not fully reflect this. In a trading update the insurer said nine-month total gross written premiums totalled GBP3.13 billion, up 5.5% from GBP2.97 billion last year. Ongoing GWP has risen 12% to GBP2.54 billion from GBP2.27 billion. Motor GWP rose 11% while those for Home insurance rose 17%.
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OTHER COMPANIES
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The chief executive and two employees of Perth, Australia-based company Resolute Mining Ltd, which owns a gold mine in Mali, were detained while in Bamako to discuss disputes with the authorities, the firm said. CEO Terence Holohan and two of his colleagues "were in Bamako to hold discussions with the mining and tax authorities regarding general activities related to the company's business practices in Mali", the firm said in a statement on Sunday. The talks also involved "progressing open claims which have been made against Resolute and which the company maintains are unsubstantiated," the statement added. "Following the conclusion of these meetings on Friday, the three employees were unexpectedly detained." The Resolute executives were arrested at a hotel in the Malian capital and taken to a specialised unit set up by the junta to tackle corruption, and economic or financial crimes, a judiciary source told AFP on Saturday. They are being questioned over suspicions of false evidence and misappropriation of public goods, said a Resolute executive on condition of anonymity. The company has provided the authorities with "detailed responses" to the accusations, according to the statement.
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Aquis Exchange has agreed to a 727p per share cash takeover offer from Switzerland's Six Group. The offer valued Aquis at GBP207 million or GBP225 million fully diluted, or an enterprise value of GBP194 million. The agreement follows "several unsolicited proposals from Six", and the offer has support from holders of 51% of its shares.
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By Emma Curzon, Alliance News reporter
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