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FTSE 100 Live 11 September: GDP figure disappoints, Rightmove rejects bid approach

Miners and banks support FTSE 100, WH Smith surges 11% in FTSE 250

08:52 , Graeme Evans

The FTSE 100 index is 10.85 points higher at 8216.83, a performance driven by an improved session for mining stocks Glencore and Rio Tinto.

Barclays and NatWest also posted gains of 2.3p to 219p and 5.4p to 331.2p respectively, while BT Group put on 1.85p to 141.9p.

Rentokil Initial shares made the biggest move, reversing 18% or 84.7p to 390.8p after it revealed more trading disappointment in North America.

The FTSE 250 index dipped 22.86 points to 20,633.28.

WH Smith was one of two standout performers, up 11% or 130p to 1357p after reporting strong trading over the summer alongside a £50 million share buyback.

Trustpilot surged 9% or 17p to 210p as the consumer reviews platform’s half-year earnings of $11 million beat hopes. It extended buybacks by another £20 million.

Rentokil shares slide after US downgrade

08:29 , Graeme Evans

Rentokil Initial shares are down 17% after the pest control and washroom services firm downgraded expectations for its North America business.

With trading below forecast in July and August, the group now sees revenues growth near 1% compared with guidance of at least 2% in half-year results.

Rentokil said the rest of the group is performing well but the pressure in North America means its operating margin will now be about 15.5%, down on the 16.6% reported last year.

The FTSE 100 shares opened 81p lower at 394.5p, wiping out the recovery since May as the integration of major US acquisition Terminix weighs on sentiment.

Downside risks building after GDP setback

07:44 , Graeme Evans

July’s stagnation following the economy’s growth spurt earlier in the year will raise fears the UK is on the cusp of another downturn.

Capital Economics believes a mild slowdown in GDP growth to more normal quarterly rates of 0.3% is more likely than a drop into recession.

It notes the quarterly rate dipped only slightly from 0.6% in June to 0.5% in July, while other indicators such as activity PMIs suggest the economy is still expanding by about 0.4%.

The consultancy said: “For now, we are sticking to our view that the Bank of England will keep interest rates unchanged in September before cutting rates again in November.

“But today’s data has made an interest rate cut next Thursday a bit more likely.”

In July, the UK’s services activity growth came in softer than expected at 0.1%, while production output contracted 0.8% and construction by 0.4%.

Deutsche Bank said: “From seeing upside risks to Q3 GDP growth, relative to our baseline of 0.4% quarter-on-quarter, we now see downside risks building given the weaker than expected GDP print.”

Brent Crude below $70 at three-year low

07:26 , Graeme Evans

Brent Crude today remained below $70 a barrel, having fallen 3.7% to close yesterday’s session at its lowest level since December 2021.

The benchmark has dropped by about 20% since early July, driven by a range of factors including fears of a sharper downturn for the global economy.

Oil cartel Opec yesterday downgraded its forecast for oil demand growth over the next two years, putting further pressure on prices.

The drop in prices last night caused BP shares to lose another 2% to leave the energy giant below 400p for the first time in two years.

Brent Crude rallied by just under 1% this morning, leaving the benchmark at $69.91 a barrel.

Rightmove rejects £5.6 billion bid from Rupert Murdoch's REA

07:21 , Michael Hunter

The board of FTSE 100 property website Rightmove has “unanimously” rejected the £5.6 billion international takeover approach for the company from REA.

It said the offer from the Australian firm controlled by Rupert Murdoch’s News Corp was “wholly opportunistic and fundamentally undervalued Rightmove and its future prospects”.

Under the City’s takeover code, REA has until 5.00 p.m. on 30 September to announce a full bid or walk away.

REA’s bid was priced at 698p. Rightmove’s shares closed yesterday at 670.8p. They are up by about a fifth since the REA approach emerged.

US technology stocks rally ahead of US inflation, Brent Crude at $70

07:12 , Graeme Evans

A mixed performance by Wall Street markets ahead of today’s US inflation reading has set the tone for a lacklustre start to trading in London.

The FTSE 100 index is forecast to open slightly lower, having fallen 0.8% in yesterday’s session as oil stocks continue to struggle on the back of Brent Crude’s decline to $70 a barrel.

Technology stocks fared the best on Wall Street last night as the Nasdaq Composite closed 0.8% higher and the S&P 500 index rose by 0.5%. In contrast, the Dow Jones Industrial Average fell by 0.2%.

Economists expect the annual rate of US inflation to fall to 2.6% from 2.9% the previous month, with the reading on core prices unchanged at 3.2%.

The US Federal Reserve meets next week amid expectations that policymakers will consider a half point cut in interest rates.

GDP below forecast in July

07:04 , Graeme Evans

The UK economy failed to grow in July, official figures showed today.

The flat GDP reading mirrored the previous month’s performance and compared with City expectations for growth of 0.2%.

Across the three months to July, GDP growth of 0.5% came in slightly short of forecasts.