(Alliance News) – London’s FTSE 100 fell, but its European counterparts rose and US stocks are set to open higher as attention turns to US jobs data and the outcome of a vote key in France.
The FTSE 100 index lost 18.05 points, or 0.2%, to 8,341.36. The FTSE 250 gained 31.42 points, 0.2%, to 20,924.16, and the AIM All-Share rose 0.75 points, 0.1%, to 735.84.
The Cboe UK 100 lost 0.4% to 837.01, the Cboe UK 250 rose 0.4% to 18,462.91, and the Cboe Small Companies fell 0.3% to 15,922.01.
The CAC 40 in Paris gained 0.3% early in the afternoon. The DAX 40 in Frankfurt jumped 0.9%.
US stocks are set to rise. The Dow Jones Industrial Average is up 0.4%, the S&P 500 is up 0.3% and the Nasdaq Composite is up 0.6%.
The largely positive session for European stocks on Wednesday follows a “strange 24 hours in South Korea”, which saw martial law briefly declared, commented Kathleen Brooks, an analyst at XTB.
“If anyone thought political risk would calm down in the final weeks of 2024, they were wrong,” Ms Brooks said.
“This reminds us that political risks can arise in unexpected places. It is now expected that there will be a presidential election in South Korea in the first half of 2025. Analysts also point out that events in Korea South Korea is a staunch ally of the United States and a key democracy in the Asian region. However, after Tuesday’s subversion of the democratic process, can the United States. count on South Korea while the China flexes its muscles in the region and supports North Korea? The diplomatic ramifications of the events in South Korea could be far-reaching However, the market reaction could be muted, as investors have become adept at assessing political risk. “.
All eyes are also on political developments in France.
The French government faces votes of no confidence on Wednesday that could spell the end of Prime Minister Michel Barnier’s short-lived administration, plunging the country into unprecedented political chaos.
Rabobank analysts commented: “Despite the significant problems facing the UK economy, it at least has a stable government and budget in place. France and Germany both face significant political challenges and structural problems that could undermine the value of the euro in the months to come.
The pound was quoted at USD 1.2675 early Wednesday afternoon, compared to USD 1.2660 at the close of London stock markets on Tuesday. The euro settled at $1.0506, down from $1.0513. Against the yen, the dollar traded at 150.88 yen, up from 149.44 yen.
Still to come on Wednesday is a US ADP employment report at 1315 GMT, ahead of a pair of US Purchasing Managers Index readings at 1445 GMT and 1500.
UK data showed growth in the services sector slowed last month. The euro zone’s services sector, meanwhile, was in contraction for the first time since the start of the year.
Brent oil was trading at $73.85 a barrel early Wednesday afternoon, up from $73.67 late Tuesday. Gold was higher at $2,645.86 an ounce, from $2,644.88.
In London, Legal & General shares rose 4.6% as the company gave a decent outlook for a unit and suggested shareholders could benefit from a return on their investment. The life insurer expects single-digit growth in operating profit for 2024, in line with its guidance. Thereafter, it plans to achieve its target of 6% to 9% compound annual growth in core operating earnings per share between 2024 and 2027.
This update comes ahead of a “deep dive” into its Institutional Retirement division, the first in a series of events that will cover all of its units.
“The global pensions risk transfer market is growing and attractive, and the group is well positioned to continue to capture this opportunity,” L&G said.
Its pipeline of PRT contracts is “as strong as it’s ever been.” Its target of £50 billion to £65 billion of UK pension risk transfers between 2024 and 2028 remains unchanged. In the Institutional Retirement division, it expects compound annual operating profit growth of between 5% and 7% between 2023 and 2028.
L&G added: “Since the start of the year, we have underwritten aggregate PRT volumes of £10.0 billion and we have exclusivity on a further £500 million which is expected to close in 2024. On of this GBP 10.5 billion, GBP 8.4 billion is subscribed in the UK and GBP 2.1 billion internationally, with L&G having subscribed the highest volumes of its history in the United States and Canada.
The claims ratio was also lower than expected, standing at 1%, while initial forecasts were below 4%.
“We plan to return to shareholders some of the capital that has not been deployed this year. This will be part of the board’s broader consideration of repurchase capacity, which will be presented during the financial year results 24 in March 2025, and will be in addition to the capital return intentions indicated during the capital markets event in June,” the company added.
Drugmaker AstraZeneca, down 2.7%, water utility Severn Trent, down 2.0%, and electricity transmission and distribution provider National Grid, down 1.0%. .4%, however, put pressure on the FTSE 100.
“Defensive sectors such as pharmaceuticals and utilities were lagging,” commented Dan Coatsworth, analyst at AJ Bell.
“These titles were in high demand Tuesday afternoon after South Korean President Yoon Suk Yeol briefly declared martial law. The situation appears to have defused as quickly as it escalated, with lawmakers voting to ‘invalidation of the decision’.
Elsewhere in London, Learning Technologies gained 6.9% as it backed an £802 million buyout by a private equity firm.
The London-based talent management and digital learning company will be acquired by GASC ABF LP and certain of its managed or advised funds, a group collectively known as General Atlantic.
General Atlantic will pay 100 pence in cash per Learning Technologies share, a 34% premium to the share price of 74.9 pence on September 26, the day before the private equity fund’s interest was revealed.
The offer makes Learning Technologies worth £802.4 million.
On AIM, Biome fell 38% after issuing a warning on its annual turnover due to component delivery issues.
The company specializing in bioplastics and radio frequency technologies said two projects in the latter division were unlikely to start by the end of the year.
“Additional complexities related to component deliveries for the two major projects, which were to be completed in 2024, have emerged recently. In two specific cases, externally manufactured parts and purchased assemblies had to be reworked or returned to their suppliers to be replaced,” Biome explained.
“The technical pathways for recovery and replacement are clear. However, despite the considerable efforts made recently to accelerate this work, the timetables are such that this work cannot be carried out within a time frame allowing the construction of the two machines to be completed and the acceptance process for internal tests and customer tests before the end of 2024. The internal completion dates have therefore been revised to the first quarter of 2025 and new final acceptance dates are under discussion with the customers.”
The company now expects revenue to be “materially below current market expectations, with a consequent impact on profitability.”
By Eric Cunha, Editor-in-Chief of Alliance News
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