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London open: Stocks recover after Tuesday’s losses; Mondi jumps
London stocks rose in early trade on Wednesday, recovering from heavy losses in the previous session.
At 0835 BST, the FTSE 100 was up 0.5% at 8,227.41, having closed down 1.4% on Tuesday, with miners in particular under the cosh as investors were left disappointed that China did not announce further stimulus measures.
Stocks in mainland China and Hong Kong slid overnight after China’s top economic planner, the National Development and Reform Commission, failed to announce more stimulus at a press conference.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Investors are searching for a sense of direction amid a cacophony of developments, as harsh geopolitical winds swirl and a fierce storm barrels towards Florida. Oil prices have tracked higher again, as hopes for a ceasefire between Israel and Hezbollah fade, while Hurricane Milton threatens to disrupt energy supplies, with some pipelines and delivery terminals in Tampa already shut.
“Brent Crude is currently trading around $77.5 a barrel. Prices had dipped sharply yesterday, amid hopes the Hezbollah leadership would not tie negotiations for a ceasefire to what’s happening in Gaza. But given how previous deals in stopping violence in the Middle East have seemed so close, but have ultimately collapsed, it’s not surprising that confidence in agreeing even a limited break in the war is waning, prompting supply concerns to swirl again.
“The FTSE 100 is set to gain back a little ground, following yesterday’s losses, but caution is in the air following another highly volatile session for indices in Asia. The wave of enthusiasm which greeted the kitchen sink stimulus from the People’s Bank of China is ebbing away, given the lack of detail for further fiscal stimulus. Banks in China might be ready to lend, with lower rates and deposit requirements on offer, but if the demand isn’t there, it’s still set to hold back an economic rebound. Investors had been hoping for more details on an expected fiscal stimulus, hoping tax breaks would reinvigorate consumers and companies to borrow, but the vague plan put on the table yesterday by authorities disappointed.”
In equity markets, Mondi jumped to the top of the FTSE 100 after the paper and packaging firm announced the acquisition of the Western European corrugated converting and solid board assets of Schumacher Packaging for an undisclosed sum.
Mondi said the deal will expand its corrugated footprint in key markets and add complementary fibre-based products focused on ecommerce and FMCG to enhance its existing offering.
United Utilities was boosted by an upgrade to ‘outperform’ from ‘sector perform’ at RBC Capital Markets.
Rio Tinto was a little weaker after saying it had struck a deal to buy Arcadium Lithium for $6.7bn, placing it among the main producers of the key component of electric vehicle batteries. The mining giant said it was offering $5.85 a share in cash – a 90% premium to the stock’s closing price at the end of last week.
CMC Markets surged as it said net operating income for the first half was expected to have risen 45% on the prior year to £180m and that it expects to have swung to a pre-tax profit of £51m from a loss of £2m.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Mondi Plc | +3.53% | +49.50 | 1,453.00 |
| 2 |  |
United Utilities Group Plc | +2.44% | +24.50 | 1,030.50 |
| 3 |  |
Marks And Spencer Group Plc | +2.07% | +7.70 | 379.60 |
| 4 |  |
Bp 9% 2nd Prf | +1.94% | +3.00 | 158.00 |
| 5 |  |
Smurfit Westrock Plc | +1.90% | +66.00 | 3,535.00 |
| 6 |  |
Ck Infrastructure Holdings Limited | +1.70% | +8.90 | 532.90 |
| 7 |  |
Banco Santander S.a. | +1.61% | +6.00 | 378.50 |
| 8 |  |
Croda International Plc | +1.59% | +66.00 | 4,227.00 |
| 9 |  |
Wise Plc | +1.54% | +10.00 | 661.00 |
| 10 |  |
Informa Plc | +1.40% | +11.20 | 812.60 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Woodside Energy Group Ltd | -1.80% | -24.00 | 1,310.00 |
| 2 |  |
South32 Limited | -1.52% | -2.80 | 181.60 |
| 3 |  |
Pershing Square Holdings Ltd | -0.63% | -22.00 | 3,474.00 |
| 4 |  |
Natwest Group Plc | -0.55% | -1.90 | 346.70 |
| 5 |  |
Smith (ds) Plc | -0.48% | -2.20 | 457.20 |
| 6 |  |
Rolls-royce Holdings Plc | -0.42% | -2.20 | 525.40 |
| 7 |  |
Rio Tinto Plc | -0.40% | -20.00 | 5,024.00 |
| 8 |  |
3i Group Plc | -0.19% | -6.00 | 3,210.00 |
| 9 |  |
Flutter Entertainment Plc | -0.14% | -25.00 | 18,000.00 |
| 10 |  |
Gsk Plc | -0.10% | -1.50 | 1,451.50 |
US close: Tech stocks lead markets higher
US stocks finished higher on Tuesday, with the Nasdaq outperforming the other main benchmarks as all Magnificent Seven heavyweights advanced.
The Dow rose 0.3%, rebounding slightly after retreating sharply from a record high the previous session, while the S&P 500 gained 1% and the Nasdaq jumped 1.5%.
Nevertheless, global equity markets were volatile earlier in the day after China’s National Development and Reform Commission underwhelmed failed to deliver more stimulus measures at their conference, causing stocks with heavy exposure to China to drop.
Markets in mainland China rose strongly as traders returned to their desks following the Golden Week break, while the Hang Seng index in Hong Kong – which stayed open during the week-long holiday – tumbled 9.4%.
Oil prices were pulling back sharply on Tuesday after surging to a six-week high the previous session. West Texas Intermediate was down 4.4% at $73.78 a barrel, after topping the $77 mark on Monday on the back of supply concerns amid another escalation of conflict in the Middle East.
In economic news, the US trade deficit narrowed to a five-month low of $70.4bn in August from $78.8bn in July, according to the Bureau of Economic Analysis, slightly lower than the $70.6bn consensus forecast. Exports increased 2% to a record high of $271.8bn, while imports dropped 0.9% to $342.2bn.
Elsewhere on the macro front, the National Federation of Independent Business’ September optimism index increased to 91.5 in September, missing forecasts of 91.7 and marking the 33rd consecutive month below the 50-year average of 98.
Market movers
PepsiCo finished higher despite cutting its annual organic revenue guidance as it highlighted a “subdued” performance in North America in the third quarter. The drinks giant now expects organic revenue to rise by low single-digits in FY24, down from a previous forecast of approximately 4% revenue growth, however guidance on earnings came in ahead of market forecasts.
Providing a spark on the Nasdaq was Nvidia, rising 4% after positive comments from the chairman of customer Foxconn about demand. All six of the remaining Magnificent Seven – namely, Apple, Microsoft, Alphabet, Amazon.com, Meta Platforms and Tesla – also rose.
Shares of China-based companies were firmly out of favour, such as Trip.com, JD.com, Baidu and NetEase, while mining stocks like Freeport-McMoRan and Alcoa were weaker due to demand concerns.
Casino operators Las Vegas Sands and Wynn Resorts, which have exposure to China through their Macau operations, were also lower.
Oil stocks sank as they followed the price of crude lower, including Chevron, Marathon Petroleum, HF Sinclair, Valero Energy, Phillips 66, ConocoPhillips, Marathon Oil and Halliburton.
Wednesday newspaper round-up: Telecoms companies, zero-hours contracts, Boeing
The UK advertising watchdog has cracked down on marketing campaigns by telecoms companies including BT, EE, Virgin Media and O2 for misleading consumers about price rises added to their bills during their contracts. The Advertising Standards Authority (ASA) has issued a batch of rulings against ads run by BT, its subsidiaries EE and Plusnet, as well as TalkTalk, O2 and Virgin Media broadband. – Guardian
Boeing said on Tuesday that it had withdrawn its pay offer to about 33,000 US factory workers and no further negotiations were planned with their union representatives as a strike nears its fourth week. Boeing and the union held their latest round of negotiations with federal mediators on Monday and Tuesday, but talks collapsed and the sides were left locked in acrimonious stalemate showing no signs of being resolved anytime soon, a person briefed on the talks said. – Guardian
Jobs with zero-hours contracts attract 25pc more applicants than equivalent permanent roles, research has found, as Angela Rayner plots a crackdown on the controversial working arrangements. Academics at the London School of Economics (LSE) found workers on zero-hours contracts had “a very strong preference” for their set-up and were “willing to forgo some salary for the flexibility their contract offers.” – Telegraph
More than two in five employers say they will cut their staff pension contributions where they can if the chancellor introduces national insurance on them in the budget this month. An informal poll of more than 600 employers found 42 per cent of those that pay more than the statutory minimum would reduce their contributions. – The Times
When Diversified Energy joined London’s junior market seven years ago, it positioned itself as a rare and different prospect from the other oil and gas minnows. The American producer pledged to hand back bumper cash returns to investors, backed by a steady stream of cash from the unloved gas wells of the energy majors. The assurance was met with scepticism by some analysts even then, but for a time the company defied its critics, helping to propel its market value from just under £70 million at its admission to Aim to £1.1 billion in 2022. – The Times
