London open: FTSE nudges up as investors eye US PCE
London stocks nudged up in early trade on Friday following solid gains on Wall Street and with Chinese markets on track for their best week since 2008, as investors eyed the release of the Federal Reserve’s favourite gauge of inflation.
At 0820 BST, the FTSE 100 was up 0.1% at 8,296.78.
Stocks in China got an added boost after the central bank cut its main policy rate and financial institutions’ reserve requirement ratio (RRR) in a bid to boost lending. The People’s Bank of China cut the seven-day reverse repo rate to 1.5% from 1.7%.
The overall mood in markets was also lifted by better-than-expected US initial jobless claims on Thursday and "some relief that the final print for second quarter GDP growth was held firm at 3%," said Derren Nathan, head of equity research at Hargreaves Lansdown.
"There’s a swathe of further economic touch points to digest later today both in Europe and the US. Growth in the EU has been much harder to come by with many pointing to structural deficits in terms of innovation and productivity," he said.
"First up today will be German unemployment figures followed by multiple sentiment and confidence indicators for the wider eurozone. There’s also consumer price index (CPI) figures to help take the lates pulse on inflation so overall expect a clearer picture of whether a soft landing remains in site.
"US inflation figures will also be closely scrutinised. Core personal consumption expenditure (PCE) is expected to have risen between 0.1% and 0.2% last month. Any significant rise above that range could dampen the prospects of further rate cuts by the Fed whose current forecast suggests another half point reduction by the end of 2024."
The US PCE figures for August are due at 1330 BST.
In equity markets, Prudential was the top gainer on the FTSE 100 as it announced that PT Prudential Sharia Life Assurance has entered into a long-term strategic bancassurance partnership with Bank Syariah Indonesia (BSI). The partnership will see Prudential will become the Syariah life insurance provider of BSI from early 2025 and BSI will market, promote, distribute and/or refer Prudential products to its customers.
Asia-focused Prudential has gained sharply this week, lifted by news of China’s various stimulus measures.
Elsewhere, food producer Cranswick rallied after saying it expects annual results to be at the upper end of expectations as first-half trading came in ahead of the previous year.
The company said it was still cautious about "current market and wider economic and geopolitical conditions", but noted that trading since the end of the first quarter "has been stronger than previously expected, underpinned by continued robust volume growth in our core UK food business (and) a positive ongoing contribution from our expanding pig farming operations".
Clinical-stage biotherapeutics company PureTech Health was also up as it said the schizophrenia treatment it developed, which was later sold to Bristol Myers Squibb, has been approved by US regulators, triggering a $29m payment and unlocking potential future royalties.
Market Movers
FTSE 100 (UKX) 8,296.78 0.14%
FTSE 250 (MCX) 21,092.70 0.39%
techMARK (TASX) 4,844.47 0.00%
FTSE 100 - Risers
Prudential (PRU) 703.60p 3.08%
Pershing Square Holdings Ltd NPV (PSH) 3,652.00p 2.94%
Smith & Nephew (SN.) 1,147.00p 1.64%
Rio Tinto (RIO) 5,312.00p 1.50%
Melrose Industries (MRO) 470.20p 1.12%
Antofagasta (ANTO) 2,043.00p 0.94%
BP (BP.) 388.15p 0.83%
Convatec Group (CTEC) 228.60p 0.80%
Diageo (DGE) 2,629.50p 0.78%
Glencore (GLEN) 424.85p 0.78%
FTSE 100 - Fallers
Flutter Entertainment (DI) (FLTR) 18,305.00p -1.67%
Intermediate Capital Group (ICG) 2,316.00p -1.37%
Barclays (BARC) 225.00p -0.97%
NATWEST GROUP (NWG) 343.60p -0.92%
Diploma (DPLM) 4,492.00p -0.71%
Fresnillo (FRES) 629.50p -0.71%
Berkeley Group Holdings (The) (BKG) 4,811.00p -0.68%
Rolls-Royce Holdings (RR.) 522.80p -0.61%
Intertek Group (ITRK) 5,180.00p -0.58%
Standard Chartered (STAN) 799.20p -0.55%
FTSE 250 - Risers
Mitie Group (MTO) 125.00p 4.87%
Discoverie Group (DSCV) 618.00p 4.57%
Dr. Martens (DOCS) 55.70p 3.18%
Fidelity China Special Situations (FCSS) 206.50p 3.16%
Watches of Switzerland Group (WOSG) 477.80p 3.08%
AJ Bell (AJB) 463.50p 2.89%
FirstGroup (FGP) 153.10p 2.82%
Mony Group (MONY) 221.40p 2.79%
Rotork (ROR) 346.60p 2.54%
Me Group International (MEGP) 200.00p 2.46%
FTSE 250 - Fallers
Bakkavor Group (BAKK) 150.00p -3.23%
Elementis (ELM) 155.00p -2.76%
Computacenter (CCC) 2,516.00p -2.16%
Foresight Group Holdings Limited NPV (FSG) 518.00p -1.52%
Fidelity Emerging Markets Limited Ptg NPV (FEML) 680.00p -1.45%
Baltic Classifieds Group (BCG) 295.00p -1.17%
Quilter (QLT) 131.40p -1.13%
Trustpilot Group (TRST) 219.50p -1.12%
Pagegroup (PAGE) 376.40p -1.10%
ICG Enterprise Trust (ICGT) 1,180.00p -1.01%