The FTSE 100 proved resilient at the open on Friday, while global trading remained generally downbeat on a stubborn US inflation print and disappointing economic data from China.
The FTSE 100 index opened up 3.63 points at 7,648.41. The FTSE 250 was down 48.99 points, 0.3%, at 17,786.70, and the AIM All-Share was down just 0.17 of a point at 695.40.
The Cboe UK 100 was marginally higher at 764.04, the Cboe UK 250 was down 0.2% at 15,447.16, and the Cboe Small Companies was down 0.1% at 12,896.15.
London’s large cap FTSE 100 index was edging slightly into the green thanks to the support of commodity stocks, amid rising oil prices and Chinese data. This helped to offset weakness from St James’s Place, as its shares plunged 10%.
In European equities on Friday, the CAC 40 in Paris was down 0.1%, while the DAX 40 in Frankfurt was down 0.3%.
In the US on Thursday, Wall Street ended lower, with the Dow Jones Industrial Average down 0.5%, the S&P 500 and the Nasdaq Composite both closed down 0.6%.
The US yearly inflation rate was unmoved at 3.7% in September, according to the Bureau of Labor Statistics. It had been expected to cool to 3.6%, according to FXStreet-cited consensus.
‘At the end of the week, the markets are caught in the tug of war over the outlook for US interest rates. On the one hand, there are strong indications from Fed officials and the released Fed minutes that suggest rate hikes are likely finished. On the other hand, economic data is not yet aligned with this narrative.
The dollar mostly consolidated its gains against major currencies in early transactions in Europe,’ said SPI Asset Management’s Stephen Innes.
Sterling was quoted at $1.2189 early Friday, lower than $1.2209 at the London equities close on Thursday. The euro traded at $1.0535, down from $1.0547. Against the yen, the dollar was quoted at JP¥149.67, down versus JP¥149.77.
In Asia on Friday, the Nikkei 225 index in Tokyo closed down 0.6%. In China, the Shanghai Composite closed down 0.7%, while the Hang Seng index in Hong Kong was down 2.1% in late dealings. The S&P/ASX 200 in Sydney closed down 0.6%.
The latest series of Chinese data pointed to ongoing weakness in the country’s economic recovery, though export data was slightly better than expected.
Official consumer price inflation data showed prices for goods and services remained unchanged in September compared to the same month last year, a warning signal of impending deflation. Analysts had expected a slight price increase, after annual inflation of 0.1% in August.
Meanwhile, Chinese trade also continued to slump, but improved from the previous month. The National Bureau of Statistics said exports fell 6.2% annually in September, which was less severe than the FXStreet-cited market consensus of an 8.3% fall. It was also softer than the 8.8% decline seen in August. Imports fell 6.2% from the year before, which was slightly worse than forecasts of 6.0%. Imports had fallen 7.3% in August.
‘The only thing that’s exciting about China is the expectation that the government will throw more money on to the Chinese problems, and that could, maybe, inflate asset prices,’ said Swissquote Bank’s Ipek Ozkardeskaya.
Gold was quoted at $1,877.41 an ounce early Friday, higher than $1,871.43 on Thursday. Brent oil was trading at $87.45 a barrel, up sharply from $86.58.
In the FTSE 100, commodity stocks rose in the wake of the China data. Oil majors BP and Shell added 1.7% and 1.3%, while miners such as Endeavour and Glencore rose 2.2% and 0.9%.
However, it was a different story for St James’s Place, with shares in the wealth manager tumbling 10%.
SJP responded to media reports that it is under pressure to change its fee and charges structures for clients.
The wealth manager said it was continuing to build on the work completed for Consumer Duty, as previously disclosed, which includes an assessment of its fees and charging models. SJP said it was ‘engaging with all of [its] primary regulators during this process’.
It added: ‘Whilst the evaluation has not yet been completed and therefore no decision has been made, we are confident that all the options under consideration will ensure value for clients and a strong, secure, and sustainable business for all stakeholders.’
The Financial Times had reported SJP was facing pressure from regulators to change its fee structure, with critics citing ‘opaque and expensive charges’ for financial advice, as well as ‘stiff penalties’ for early withdrawals.
Shares in British American Tobacco also fell 1.5%, after the US federal drug regulator told its US subsidiary to halt sales of its menthol-flavoured Vuse Alto vape, the most popular e-cigarette in the US, following a jump in popularity of the product among underage users.
The Food & Drug Administration said on Thursday that it had issued marketing denial orders for six vaping products sold by BAT-owned RJ Reynolds Vapor under its Vuse Alto brand. Three of the products were menthol-flavoured and three ‘mixed berry’, the FDA added.
The company must not market or distribute these products in the US or they risk FDA enforcement action. However, the company may submit new applications for the products that are subject to these MDOs.
In the FTSE 250, Ashmore fell 2.7%.
The emerging market asset manager said its total assets under management fell 7.5% over its first quarter, which ended September 30. At the end of the period, AuM totalled $51.7 billion, down from $55.9 billion at the end of June.
This was due to a combination of negative investment performance and net outflows, Ashmore explained. The firm’s CEO, Mark Coombs, said it was ‘normal’ to see a period of consolidation within a longer recovery cycle, after the previous three quarters of positive returns.
Further afield, the UK Competition & Markets Authority said it has cleared the revised merger deal proposed by Microsoft for its $68.7 billion takeover of Activision Blizzard. The revised deal would see Activision’s cloud gaming rights sold to an independent third party, Ubisoft Entertainment , before Microsoft completes the takeover.
Friday’s economic calendar has eurozone industrial production data at 1000 BST.
Over in New York, the banking sector comes into focus, with third-quarter results from JPMorgan Chase, Wells Fargo and Citi.
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