London close: Markets rebound from China-fuelled losses

The FTSE 100 index rose 0.65%, closing at 8,243.74 points, while the FTSE 250 climbed 0.93% to end the session at 20,822.38 points.

In currency markets, sterling was last down 0.21% on the dollar to trade at $1.3077, while it edged 0.08% higher against the euro, changing hands at €1.1944.

“US and European indices have clawed their way higher for another day, though the FTSE 100 has endured a much more muted session,” said IG chief market analyst Chris Beauchamp.

“Notably, tech stocks have avoided too much of a dramatic reaction to news of a possible antitrust move on Alphabet, even if the search engine titan itself is down over 1%.

“The clock is ticking down to tomorrow’s US inflation reading; a higher reading tomorrow would give the chances of a hold next month quite a boost, lifting the dollar too.”

Beauchamp added that oil bulls had been unable to drive the price higher over the last 48 hours, bereft of news from the Middle East and now beset by a hefty rise in inventory levels.

“A substantial Israeli response is still likely, but if it stops short of oil and nuclear installations then we can expect further selling in Brent and WTI.”

German trade surplus jumps beyond forecasts, economy set to contract

It was a quiet day for UK economic data, with no major releases scheduled.

In Germany, the trade surplus surged beyond expectations in August, driven by a 1.3% rise in exports compared to the previous month.

While that marked a slowdown from July’s 1.7% growth, it outpaced the forecasted 1% decline.

Exports to the EU increased by 0.8%, while non-EU exports grew 1.9%.

Notably, exports to the US jumped 5.5%, and shipments to the UK surged 5.7%.

Imports, however, fell by 3.4%, contributing to a foreign trade balance of €22.5bn, well above market expectations of €18.4bn.

Germany’s economic outlook remained bleak, with the economy ministry now projecting a 0.2% contraction in 2024, the second consecutive year of shrinking output.

The revision followed a previous forecast of modest growth, underscoring ongoing challenges in the eurozone’s largest economy.

Germany was set to be the only G7 nation facing back-to-back contractions, reflecting weak demand in its export and manufacturing sectors.

Across the Atlantic, mortgage applications in the US dropped 5.1% in the week ended 4 October, extending the prior week’s decline.

Refinance applications fell 9%, though they remained significantly higher than a year ago, while home purchase applications held steady.

Rising mortgage rates, spurred by increasing Treasury yields and robust labour data, were tempering demand as markets anticipated less accommodative monetary policy from the Federal Reserve.

Mondi jumps on acquisition plans, CMC Markets reverses gains

On London’s equity markets, Mondi shares jumped 4.03% after the paper and packaging company announced the acquisition of Schumacher Packaging’s Western European corrugated converting and solid board assets.

The acquisition, for an undisclosed sum, was expected to strengthen Mondi's presence in key markets and enhance its product range, particularly in the e-commerce and fast-moving consumer goods sectors.

United Utilities Group rose 1.44%, buoyed by an upgrade to ‘outperform’ from ‘sector perform’ by RBC Capital Markets, which improved investor sentiment towards the utility company.

Mining giant Rio Tinto edged up 0.08% after revealing plans to acquire Arcadium Lithium for $6.7bn.

The deal would position Rio Tinto as a major player in lithium production, a key component in electric vehicle batteries.

It was offering $5.85 per share in cash, representing a 90% premium on Arcadium’s closing price last week.

On the downside, CMC Markets slipped 0.49% despite reporting a 45% rise in first-half net operating income to £180m and an expected pre-tax profit of £51m, up from a £2m loss the previous year.

Shares in China-related trusts were also under pressure, with Asia Dragon Trust falling 0.92%, and Fidelity China Special Situations dropping 1.79%.

The declines followed a downturn in the Shanghai market overnight, as investors grew concerned about the lack of additional government stimulus measures to support the Chinese economy.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,243.74 0.65%
FTSE 250 (MCX) 20,822.38 0.93%
techMARK (TASX) 4,807.66 0.87%

FTSE 100 - Risers

Mondi (MNDI) 1,460.00p 4.03%
Centrica (CNA) 120.15p 3.31%
Marks & Spencer Group (MKS) 382.90p 2.96%
Ashtead Group (AHT) 5,850.00p 2.20%
Fresnillo (FRES) 632.00p 2.10%
Beazley (BEZ) 754.00p 2.03%
Smurfit Westrock (DI) (SWR) 3,539.00p 2.02%
Kingfisher (KGF) 316.10p 1.97%
Informa (INF) 816.00p 1.82%
Lloyds Banking Group (LLOY) 59.24p 1.68%

FTSE 100 - Fallers

Vistry Group (VTY) 949.00p -1.97%
Persimmon (PSN) 1,599.00p -0.56%
Taylor Wimpey (TW.) 159.85p -0.47%
Next (NXT) 9,864.00p -0.42%
Flutter Entertainment (DI) (FLTR) 17,970.00p -0.42%
National Grid (NG.) 990.20p -0.24%
Haleon (HLN) 379.30p -0.05%
Experian (EXPN) 3,861.00p -0.05%
Smith (DS) (SMDS) 459.20p -0.04%
Berkeley Group Holdings (The) (BKG) 4,688.00p -0.02%

FTSE 250 - Risers

Carnival (CCL) 1,402.50p 8.34%
St James's Place (STJ) 767.00p 5.87%
Petershill Partners (PHLL) 215.00p 4.62%
Volution Group (FAN) 612.00p 4.62%
Genus (GNS) 2,155.00p 4.61%
IP Group (IPO) 50.80p 4.31%
Bloomsbury Publishing (BMY) 688.00p 3.61%
SSP Group (SSPG) 165.80p 3.50%
Burberry Group (BRBY) 670.20p 3.48%
XPS Pensions Group (XPS) 304.00p 3.04%

FTSE 250 - Fallers

Indivior (INDV) 718.50p -4.07%
Fidelity China Special Situations (FCSS) 220.00p -1.79%
PRS Reit (The) (PRSR) 104.40p -1.51%
Pennon Group (PNN) 551.00p -1.43%
Templeton Emerging Markets Inv Trust (TEM) 168.20p -0.94%
Asia Dragon Trust (DGN) 432.00p -0.92%
Helios Towers (HTWS) 108.00p -0.92%
Currys (CURY) 88.10p -0.73%
European Opportunities Trust (EOT) 850.00p -0.70%
Harbour Energy (HBR) 271.50p -0.69%