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.

Market Movers

FTSE 100 (UKX) 8,226.45 -0.04%
FTSE 250 (MCX) 20,819.77 -0.06%
techMARK (TASX) 4,797.09 0.11%

FTSE 100 - Risers

Rightmove (RMV) 693.60p 2.85%
Flutter Entertainment (DI) (FLTR) 17,425.00p 1.60%
Marks & Spencer Group (MKS) 375.30p 1.57%
Fresnillo (FRES) 592.00p 0.94%
SSE (SSE) 1,947.50p 0.83%
Haleon (HLN) 392.60p 0.82%
Imperial Brands (IMB) 2,187.00p 0.78%
Kingfisher (KGF) 325.20p 0.74%
Next (NXT) 10,050.00p 0.74%
Auto Trader Group (AUTO) 881.00p 0.71%

FTSE 100 - Fallers

B&M European Value Retail S.A. (DI) (BME) 403.30p -4.18%
Rio Tinto (RIO) 4,745.50p -1.19%
Barclays (BARC) 224.10p -1.17%
Ashtead Group (AHT) 5,562.00p -1.14%
Smith (DS) (SMDS) 463.40p -1.07%
Antofagasta (ANTO) 1,772.50p -0.84%
Beazley (BEZ) 761.00p -0.78%
easyJet (EZJ) 515.20p -0.77%
Diploma (DPLM) 4,438.00p -0.76%
Mondi (MNDI) 1,389.50p -0.68%

FTSE 250 - Risers

Currys (CURY) 80.45p 2.61%
PPHE Hotel Group Ltd (PPH) 1,280.00p 2.40%
Dunelm Group (DNLM) 1,239.00p 2.23%
TI Fluid Systems (TIFS) 169.60p 1.92%
GCP Infrastructure Investments Ltd (GCP) 79.50p 1.53%
Carnival (CCL) 1,293.50p 1.53%
Murray International Trust (MYI) 253.00p 1.40%
Domino's Pizza Group (DOM) 293.20p 1.38%
Spirent Communications (SPT) 173.30p 1.35%
Endeavour Mining (EDV) 1,841.00p 1.15%

FTSE 250 - Fallers

Bloomsbury Publishing (BMY) 660.00p -3.23%
Fidelity Emerging Markets Limited Ptg NPV (FEML) 663.70p -2.50%
Burberry Group (BRBY) 591.40p -2.15%
Close Brothers Group (CBG) 422.00p -2.09%
Mitchells & Butlers (MAB) 292.00p -2.01%
Hays (HAS) 91.95p -1.97%
Bridgepoint Group (Reg S) (BPT) 334.00p -1.65%
North Atlantic Smaller Companies Inv Trust (NAS) 3,920.00p -1.51%
Apax Global Alpha Limited (APAX) 145.00p -1.49%
Great Portland Estates (GPE) 366.50p -1.35%