London open: Stocks start the quarter higher, US stimulus in focus
Stocks in London have started the session higher buoyed by news that US lawmakers have narrowed their differences over the proposed size of a fourth government stimulus package.
According to White House chief of staff, Mark Meadows, the latest offer from the Trump administration is "certainly above the $1.5 trillion that has been articulated to date", versus the $2.2trn proposed by Democrats.
"Stock market bulls got the signal they needed from US Treasury secretary Steven Mnuchin, who said the White House was serious about doing a deal with House Democrats on a stimulus package. Nevertheless, no agreement was reached after talks between Mnuchin and Nancy Pelosi," said Neil Wilson, chief market analyst at Markets.com.
"Stimulus is coming, the question really is only when - a deal before the election still looks difficult. Meanwhile end of month and end of quarter flows likely had a positive impact after a soft September."
As of 0929 BST, the FTSE 100 was 42.51 points or 0.72% higher at 5,908.53, although gains on the second-tier index were a more muted 0.35% or 60.35 points to 17,375.65.
In parallel, Trump had signed the stop gap spending bill needed to tidy government over until 11 December.
There was also some arguably positive news to be had on the pandemic front.
he chief executive officer of Moderna, one of the front-runners to develop a Covid-19 vaccine, told the Financial Times that it would not be ready by the 3 November elections.
Submission for approval under expedited emergency use authorisation would not be sought before 25 November - at the earliest - and he did not anticipate full-scale public distribution until spring 2021.
And the latest update from Imperial College's REACT project found that the so-called reproduction rate for the virus in England had fallen from 1.7 to 1.1, although the range for the latter figure was wide, between 0.7 to 1.5, and the prevalence of the virus has risen from 0.13% of the population to 0.55%, and was highest among young adults.
Chief on the economic calendar for Thursday were a raft of manufacturing sector surveys scheduled for release in the euro area, UK and US (at 1500 BST).
IHS Markit's factory sector Purchasing Managers' Index for September was revised lower from a preliminary reading of 54.3 to 54.1, while that for the single currency bloc was confirmed at 53.7.
A speech from European Central Bank chief economist, Philip Lane, at 1645 BST, will likely be also closely monitored after his boss at the ECB, Christine Lagarde, floated the possibility of reviewing the monetary authority's inflation target just the day before.
To take note of, also overnight, trading on the Tokyo Stock Exchange was halted for the entire session due to technical glitches.
Covid-19 vaccines in focus at quarter's start
America's main health regulator, the Food and Drug Administration, has widened its investigation into the adverse event related to one patient in AstraZeneca's ongoing phase three clinical trial of its Covid-19 vaccine candidate, Reuters reported, which remains on hold in the States. While the expanded probe increases the chances of longer delays before a potential restart of the trial in that country, it does mean that the FDA thinks there were safety issues linked to the vaccine, rather that it intends to be through.
Aircraft engine maker Rolls-Royce has unveiled plans to raise at least £3bn to shore up its balance sheet in the face of the coronavirus pandemic. The company on Thursday announced a 10-for-three £2bn rights issue and £1bn bond offering. It has also agreed a new £1bn two-year term loan facility conditional upon the rights issue completing. Roll-Royce has been hammered particularly hard by the collapse in air travel as it is paid by the number of miles flown by aircraft using its engines.
Medical technology company Smith & Nephew announced on Thursday that it is expecting a third quarter underlying revenue decline of about 4%. The FTSE 100 company said all three of its franchises showed “significant” recovery, following an overall underlying revenue decline of 29.3% for the second quarter. It said the improvement was strongest in its orthopaedics franchise, as global levels of elective surgery continued to recover.
Market Movers
FTSE 100 (UKX) 5,917.86 0.88%
FTSE 250 (MCX) 17,408.56 0.54%
techMARK (TASX) 3,777.25 0.90%
FTSE 100 - Risers
Coca-Cola HBC AG (CDI) (CCH) 1,977.00p 3.40%
Legal & General Group (LGEN) 194.30p 3.16%
Smith (DS) (SMDS) 303.50p 2.99%
Standard Life Aberdeen (SLA) 232.50p 2.88%
Melrose Industries (MRO) 118.60p 2.68%
Prudential (PRU) 1,135.50p 2.39%
BT Group (BT.A) 100.55p 2.21%
M&G (MNG) 162.60p 1.94%
Smith & Nephew (SN.) 1,545.00p 1.88%
Barclays (BARC) 99.41p 1.84%
FTSE 100 - Fallers
DCC (DCC) 5,702.00p -5.09%
Just Eat Takeaway.Com N.V. (CDI) (JET) 8,532.00p -1.84%
Rolls-Royce Holdings (RR.) 127.70p -1.77%
British American Tobacco (BATS) 2,729.00p -1.75%
InterContinental Hotels Group (IHG) 4,049.00p -1.10%
Hargreaves Lansdown (HL.) 1,551.00p -0.70%
Sage Group (SGE) 716.40p -0.61%
Rentokil Initial (RTO) 532.60p -0.56%
Spirax-Sarco Engineering (SPX) 11,005.00p -0.54%
International Consolidated Airlines Group SA (CDI) (IAG) 94.62p -0.42%
FTSE 250 - Risers
Rank Group (RNK) 101.60p 8.90%
Victrex plc (VCT) 1,892.00p 3.33%
Greencore Group (GNC) 101.00p 3.06%
Royal Mail (RMG) 246.10p 2.97%
Henderson Smaller Companies Inv Trust (HSL) 774.00p 2.93%
Spirent Communications (SPT) 294.00p 2.80%
Marks & Spencer Group (MKS) 99.94p 2.48%
Clarkson (CKN) 2,315.00p 2.43%
888 Holdings (888) 257.50p 2.18%
FDM Group (Holdings) (FDM) 1,040.00p 2.16%
FTSE 250 - Fallers
PureTech Health (PRTC) 245.50p -3.54%
TUI AG Reg Shs (DI) (TUI) 287.00p -2.01%
John Laing Group (JLG) 307.40p -1.98%
Network International Holdings (NETW) 267.80p -1.98%
WH Smith (SMWH) 934.50p -1.94%
Britvic (BVIC) 805.50p -1.89%
Energean (ENOG) 575.00p -1.88%
Just Eat Takeaway.Com N.V. (CDI) (JET) 8,532.00p -1.84%
Aberforth Smaller Companies Trust (ASL) 822.00p -1.79%
Hastings Group Holdings (HSTG) 248.20p -1.66%