(Alliance News) – Share prices in London opened higher on Wednesday morning, following a strong CPI reading for September, which showed that consumer price inflation in the UK fell to its lowest rate in more than three years.
The FTSE 100 index opened up 55.09 points, or 0.7, at 8,304.57. The FTSE 250 was up 63.24 points, or 0.3%, at 20,857.68, and the AIM All-Share was up 1.19 points, or 0.2%, at 735.05 .
The Cboe UK 100 was up 0.6% at 831.85, the Cboe UK 250 was up 0.1% at 18,389.85, and the Cboe Small Companies was down slightly at 17,056.82.
The Office for National Statistics reported that annual consumer price index inflation in the UK rose 1.7% in September, a slowdown from 2.2% in September. august. This was lower than the 1.9% rise that had been expected by the market consensus cited by FXStreet.
On a monthly basis, prices were little changed in September, down from a 0.5% rise in September 2023. Prices rose 0.3% in August and fell 0.2% in July .
The CPI including owner-occupied housing costs, or HICP, increased by 2.6% year-on-year in September, compared to 3.1% in August. On a monthly basis, the HICP increased by 0.1% in September, compared to 0.5% in September of the previous year.
Producer prices fell 2.3% year-on-year in September, following a revised 1.0% decline in August. On a monthly basis, producer prices fell 1.0%, accelerating from the 0.3% drop recorded in August.
“The downward trajectory of UK inflation, combined with slowing wage growth, underlines Bank of England Governor Andrew Bailey’s latest comments that the bank will be ‘more aggressive’ in its rates policy. This significant change in the BoE’s stance, supported by inflation data, will likely send Cable back below the 1.30 level,” said Ipek Ozardeskaya of Swissquote Bank.
In European stocks on Wednesday, the CAC 40 in Paris was down 1.0%, while the DAX 40 in Frankfurt was down 0.1%.
The European Central Bank is due to meet tomorrow and is expected to announce a further rate cut of 25 basis points.
“Headline inflation in the eurozone has recently fallen below the 2% target and European economies are struggling, with Germany seen as being in a mild recession. The only thing that could stop the ECB from proceeding to a dovish reduction would be stringent core inflation and services inflation. If so, the ECB could make a hawkish adjustment. In this case we could see a rebound in EURUSD, but considering. the deterioration of the fundamentals of the euro zone and the resistance of the American economy, the single currency could and should lose further ground against the greenback”, added Mr. Ozardeskaya.
The pound was quoted at $1.2988 early Wednesday in London, down from $1.3094 at the close of trading on Tuesday.
In the FTSE 100, housebuilders rose on Wednesday morning.
Barratt Redrow rose 2.4%, Taylor Wimpey rose 1.9%, and Persimmon rose 1.7%.
Asking rents outside London hit a new record high of £1,344 on average per month, after rising 5.2% per year, according to a property website.
The average advertised rent for London properties also hit a new record of £2,694 per month, 2.5% more than a year ago, according to Rightmove. The figures cover the third quarter of 2024 across Britain.
Rightmove said the average number of applications per rental property is now 15, down from 23 last year but almost double the eight recorded in 2019. The supply of homes available to rent has increased each year, but remains below 2019 levels.
The euro settled at 1.0883 USD, against 1.0950 USD. Against the yen, the dollar traded at 149.27 yen, down from 149.29 yen.
Rio Tinto rose 0.7%.
The Anglo-Australian mining company has released its third quarter results, which saw Pilbara iron ore shipments increase 1% year-on-year to 84.5 million tonnes. For 2024, Rio Tinto forecasts shipments of 323 to 338 million tonnes of iron ore from the Pilbara, up from 331.8 million tonnes in 2023.
Rio Tinto said: “Demand for lithium continues to grow, with sales of electric vehicles up 20% year-on-year in the first eight months, despite slower than expected uptake in Europe and the US.”
Last week, on Wednesday, Rio Tinto completed the acquisition of lithium chemicals producer Arcadium for USD 6.7 billion.
Also in the index, GSK rose 0.3%.
The U.S. Food & Drug Administration has accepted a new marketing authorization application for gepotidacin, GSK’s first-in-class investigational oral antibiotic with a novel mechanism of action for the treatment adult women (and adolescents with uncomplicated urinary tract infections).
The FDA granted priority review to this application and set a March 26, 2025 implementation date for the Prescription Drug User Fee Act.
In the FTSE 250, Moonpig gained 3.1%.
The company said it was aiming to pay a total dividend of £10m for the 2025 financial year, with the first dividend under its new policy due to be paid around March. The new policy commits to maintaining a “robust dividend coverage” of 3x to 4x over the medium term.
Moonpig also announced a £25 million share buyback, which is expected to begin in early November. Looking ahead, the company added that its medium-term objectives remain unchanged and that it still aims for double-digit annual revenue growth.
Elsewhere, Vertu Motors gained 3.7%, although it posted an interim pre-tax profit of £22.1 million, down from £30.1 million a year earlier.
Turnover increased to £2.49 billion, from £2.42 billion the previous year, while the company increased its dividend per share to 0.90 pence, from 0.85 pence .
Looking ahead, FY2025 profit remains in line with current market expectations, after September results were in line with prior year levels.
In Asia on Wednesday, the Nikkei 225 index in Tokyo was down 1.8%. In China, the Shanghai Composite Index was up 0.1%, while the Hang Seng Index in Hong Kong was up 0.5%. The S&P/ASX 200 index in Sydney closed 0.4% lower.
In the United States, Wall Street ended lower, with the Dow Jones Industrial Average and S&P 500 both losing 0.8%, while the Nasdaq Composite fell 1.0%.
Kamala Harris attacked the mental state and fitness for office of her US presidential rival Donald Trump on Tuesday after the 78-year-old Republican’s televised town hall devolved into a session of surreal and impromptu music.
Three weeks before the US election, Ms Harris’ campaign began focusing on the health and mental stability of Mr Trump, who was quick to respond by saying the former president seemed “lost, confused and frozen on stage.
At Monday’s event in Oaks, near Philadelphia, a break for two medical emergencies in the crowd turned into a bizarre 39 minutes of music and dancing, as Trump abandoned discussion of the election to put on his favorite hits, swaying awkwardly across the stage.
“Who wants to hear the questions, right?,” he said, abruptly ending the question and answer section and asking his team to turn up the volume. He then remained on stage for nine songs, ranging from opera to Guns N’ Roses to Elvis, with the ex-president alternating dance moves with standing still and staring at the crowd.
“I hope he’s okay,” Mr. Harris commented dryly on X.
Brent oil was quoted at $74.62 a barrel early in London on Wednesday, up from $73.90 late Tuesday.
Gold was quoted at $2,674.20 an ounce, up from $2,663.59.
Wednesday’s economic calendar features a speech from Eurozone European Central Bank President Christine Lagarde as well as U.S. export and import prices.
By Holly Beveridge, Alliance News senior journalist
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