London open: Stocks fall; Rightmove rejects another takeover bid from REA

25th Sep 2024 07:53

(Sharecast News) - London stocks fell in early trade on Wednesday following two days of gains, with China in focus again after a rate cut.

At 0840 BST, the FTSE 100 was down 0.3% at 8,258.71.

Earlier in the day, China's central bank slashed it medium-term lending facility from 2.3% to 2.0%, marking the largest reduction of interest rates for one-year loans to financial institutions in history.

Just one day after unveiling a list of measures designed to stimulate demand and put the economic recovery back on track, the People's Bank of China said it was also lending 300bn yuan ($43bn) to financial institutions.

The move, which was widely expected following comments from PBoC governor Pan Gongsheng the previous day, follows a raft of cuts to reserve requirements and lending rates, including for existing home loans.

Richard Hunter, head of markets at Interactive Investor, said: "Taken in tandem, the measures represent the largest set of stimulus since the pandemic, with the stock market and the beleaguered property sector in particular focus. The general wave of positive sentiment also lifted commodity prices, with oil and copper particular beneficiaries, while the currency also strengthened.

"Of course, the measures will also come with a time lag before any benefits can be seen in the real economy, but the fact that the authorities have at last responded to a growing clamour from investors for economic support has been warmly received. Chinese markets generally added another 2% in the trading session, adding to the 4% gains from the previous day when the shock announcements caught the attention of investors who had for the most part been seeking opportunities in other markets across the region, such as Japan.

"However, the FTSE 100 did not follow suit, weighed by some further sterling strength which is a headwind for the premier index and also perhaps by a more circumspect view of the Chinese stimulative measures after a positive reaction in the previous trading session. Mining stocks were for the most part unmoved by the further cut from the Chinese authorities, while Prudential gave up most of its previous gains."

In equity markets, easyJet flew higher as JPMorgan Cazenove highlighted the stock as "a high conviction" 'overweight' in the low-cost carrier space, "where the shares are flat this year despite more resilient pricing (and earnings) than peers".

JPM said it currently sees a "cleaner" pathway to high earnings growth in September 2025.

Property platform Rightmove was little changed after saying it had rejected a third, £6.1bn takeover offer from Australian outfit REA Group, saying it "materially undervalues the company and its future prospects".

REA's latest cash-and-shares proposal, equivalent to an offer price of 759p, was a 37% premium to Rightmove's share price on 30 August, the day before the first offer.

However, as Rightmove pointed out, since that time REA's own share price has dropped by 12%, essentially bringing the offer price down.

Outside the FTSE 350, DFS Furniture lost ground after saying it swung to a full-year loss in an "extremely challenging" market.

Market Movers

FTSE 100 (UKX) 8,258.71 -0.29%

FTSE 250 (MCX) 20,762.30 -0.04%

techMARK (TASX) 4,769.38 -0.32%

FTSE 100 - Risers

easyJet (EZJ) 519.40p 1.84%

Fresnillo (FRES) 607.50p 1.42%

Rio Tinto (RIO) 5,112.00p 1.25%

Glencore (GLEN) 403.35p 0.88%

Rentokil Initial (RTO) 363.60p 0.83%

Antofagasta (ANTO) 1,955.50p 0.80%

Smiths Group (SMIN) 1,738.00p 0.75%

Anglo American (AAL) 2,279.50p 0.71%

Whitbread (WTB) 3,178.00p 0.38%

InterContinental Hotels Group (IHG) 8,228.00p 0.32%

FTSE 100 - Fallers

Prudential (PRU) 654.00p -1.62%

Barclays (BARC) 223.40p -1.33%

CRH (CDI) (CRH) 6,768.00p -1.31%

National Grid (NG.) 1,031.00p -1.29%

Diageo (DGE) 2,522.50p -1.04%

Melrose Industries (MRO) 458.10p -1.04%

Sage Group (SGE) 1,015.50p -0.98%

Rolls-Royce Holdings (RR.) 521.60p -0.95%

3i Group (III) 3,333.00p -0.92%

Pershing Square Holdings Ltd NPV (PSH) 3,660.00p -0.92%

FTSE 250 - Risers

Future (FUTR) 1,075.00p 3.37%

Renewi (RWI) 634.00p 2.92%

AO World (AO.) 108.80p 1.87%

Caledonia Investments (CLDN) 3,510.00p 1.74%

Wizz Air Holdings (WIZZ) 1,339.00p 1.59%

JPMorgan Indian Investment Trust (JII) 1,040.00p 1.56%

Savills (SVS) 1,170.00p 1.56%

IntegraFin Holding (IHP) 370.00p 1.51%

Bluefield Solar Income Fund Limited (BSIF) 107.00p 1.33%

PureTech Health (PRTC) 143.60p 1.27%

FTSE 250 - Fallers

Oxford Instruments (OXIG) 2,045.00p -2.44%

Grainger (GRI) 238.50p -2.31%

Coats Group (COA) 97.00p -2.22%

Ashmore Group (ASHM) 200.00p -1.76%

Monks Inv Trust (MNKS) 1,134.00p -1.73%

Workspace Group (WKP) 648.00p -1.69%

Baillie Gifford US Growth Trust (USA) 198.40p -1.54%

AVI Global Trust (AGT) 225.50p -1.53%

BlackRock World Mining Trust (BRWM) 522.00p -1.51%

Witan Inv Trust (WTAN) 262.00p -1.50%