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| Yesterday’s UK 100 Leaders | Close (p) | Chg (p) | % Chg | % YTD |
| Pearson | 867 | 31.6 | 3.8 | 17.8 |
| Randgold Resources | 6258 | 194 | 3.2 | -15.6 |
| Diageo | 2624.5 | 55.5 | 2.2 | -3.7 |
| United Utilities | 709 | 13.6 | 2.0 | -14.5 |
| GVC Holdings | 945.5 | 16 | 1.7 | 2.2 |
| Yesterday’s UK 100 Laggards | Close (p) | Chg (p) | % Chg | % YTD |
| CRH | 2222 | -95 | -4.1 | -16.4 |
| Antofagasta | 767.4 | -27.8 | -3.5 | -23.6 |
| Ashtead | 1936.5 | -67.5 | -3.4 | -2.8 |
| Standard Life Aberdeen | 263 | -7.6 | -2.8 | -39.8 |
| Ferguson | 5351 | -151 | -2.7 | 0.4 |
| Major World Indices | Mid/Close | Chg | % Chg | % YTD |
| UK UK 100 | 7,027.0 | -27.6 | -0.39 | -8.6 |
| UK | 18,961.3 | -52.7 | -0.28 | -8.5 |
| FR CAC 40 | 5,116.8 | -28.2 | -0.55 | -3.7 |
| DE DAX 30 | 11,589.2 | -125.8 | -1.07 | -10.3 |
| US DJ Industrial Average 30 | 25,379.5 | -327.3 | -1.27 | 2.7 |
| US Nasdaq Composite | 7,485.1 | -157.6 | -2.06 | 8.4 |
| US S&P 500 | 2,768.8 | -40.4 | -1.44 | 3.6 |
| JP Nikkei 225 | 22,480.0 | -178.1 | -0.79 | -1.3 |
| HK Hang Seng Index 50 | 25,501.3 | 46.7 | 0.18 | -14.8 |
| AU S&P/ASX 200 | 5,939.5 | -2.9 | -0.05 | -2.1 |
| Commodities & FX | Mid/Close | Chg | % Chg | % YTD |
| Crude Oil, West Texas Int. ($/barrel) | 68.89 | -0.62 | -0.88 | 14.6 |
| Crude Oil, Brent ($/barrel) | 79.56 | -0.06 | -0.08 | 19.4 |
| Gold ($/oz) | 1227.36 | 0.36 | 0.03 | -5.8 |
| Silver ($/oz) | 14.60 | -0.04 | -0.27 | -13.5 |
| GBP/USD – US$ per £ | 1.3021 | – | 0.01 | -3.6 |
| EUR/USD – US$ per € | 1.1460 | – | 0.05 | -4.5 |
| GBP/EUR – € per £ | 1.1363 | – | -0.03 | 1.0 |
Click graph to enlarge
UK 100 Index called to open +20pts at 7047, still range-bound in this week’s sideways price movement, but nearing the upper range boundary. Bulls require a break above 7078 Thursday highs to test the range ceiling. Bulls requires a breach of 7029. Watch levels: Bullish 7080, Bearish 7030
Calls for a positive open come in spite of very choppy trading on Wall St and in Asia after China’s latest GDP figures pointed to the worst Chinese economic growth in almost a decade (Q3 GDP +6.5% YoY vs. 6.6% est.), while Fixed Asset Investment rebounded slightly from recent historic lows. China-sensitive UK Index Miners could also be sensitive to disappointing Chinese Industrial Production figures (5.8% YoY against 6% est., the lowest since Feb 2016).
Chinese authorities moved decisively to intervene in the markets, sounding positive notes regarding China’s economic fundamentals and announcing regulatory measures to support the markets. This has restored confidence, pulling equities into positive territory, and made a strong case for UK Index positivity moving into the European session.
Elsewhere in Europe, tensions are rising with Italy and Brussels fighting over the Italian budget deficit, with both sides refusing to budge. Continental markets are in a downbeat mood coming into the last trading session of the week.
In corporate news this morning, InterContinental Hotels Q3 net system size growth +5.1% YoY (to 826K rooms), global revenue per available room +1% YoY (Q3 RevPAR +2.7% YTD). US Q3 RevPAR -0.5% due to hurricanes hitting demand. Announced $500m in special dividend to be paid in Q1 2019. Trading in-line and company is confident in the outlook for the remainder of the year.
London Stock Exchange Q3 like-for-like organic revenue +8% YoY, total income +10%. Information systems +9%, post trade +15%, capital markets +2%. LSE increased its stake in LCH clearing house to over 80% (purchasing 15.1% of shares for £384m), funded by mix of cash and debt. Halma announced the acquisition of Limotec, a leading Belgian fire control panel designer for €9.3m
INTU Properties confirms it received a 215p/share revised cash takeover proposal from consortium of Peel Group, Olayan and Brookfield Property (improved from 205p/share offered on 11 Oct). To account for dividends paid, revised indicative proposal would be 210.4p/share.
Evraz is considering 4 major investment projects in 2019-22 to increases sales, capex of $830-990m p.a. Expects the efficiency improvement programme to help EBITDA to the amount of c. $290-300m. Man Group is planning to launch a $100m buyback to distribute proceeds from Nephila Holdings sales.
Dechra Pharmaceuticals reported Q1 trading in-line, with above-market growth in EU and NA pharmaceuticals. Remains confident in sustained growth. Announced acquisition of Laboratorios Vencofarma do Brasil for £37.8m on cash free/debt free basis.
Provident Financial Q3 collections performance at its home-credit business fell 10% below historic levels. FCA authorisation process expected to be completed in Q4. Vanquis Bank and Moneybarn trading in-line. Essentra Q3 like-for-like revenue +1.5% YoY, with Packaging returning to growth, while Filters rev. declining in Q3 due to project volatility in Europe. Specialist Components saw modest decline in sales. FY outlook unchanged.
In focus today, on a fairly quiet end to the trading week, macro-wise, will be the US Existing Home Sales (3pm), with the market expecting a slight contraction in September. Five previous home sales numbers missed consensus expectations and the weakness is likely to persist.
In the UK, Public Sector Borrowing deficit (9:30am) is expected to narrow slightly to £4.6bn in September, after hitting the largest monthly budget deficit since November last year.
In speakers today, we have the BoE Governor Carney (4:30pm, centrist), giving a speech at the Economic Club of New York. Fed’s Kaplan (2pm, dovish, non-voter) will discuss the 2008 financial crisis in New York, while his colleague Bostic (5pm, dovish, voter) participates in an armchair discussion on the economic outlook in Georgia.
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Prepared by Michael van Dulken, Head of Research