London open: Stocks gain ahead of US CPI; GSK surges on Zantac settlement

10th Oct 2024 08:06

(Sharecast News) - London stocks rose in early trade on Thursday, taking their cue from an upbeat session on Wall Street, as investors eyed the latest US inflation reading.

At 0820 BST, the FTSE 100 was up 0.3% at 8,269.93.

Richard Hunter, head of markets at Interactive Investor, said: "Global markets continued to climb the wall of worry, reversing some sharp declines from earlier in the week as investors returned to the fray.

"In the US, the Dow Jones and S&P500 notched new record highs, with buying interest in the technology sector offsetting lingering concerns around the Middle East and more domestically the effects of Hurricane Milton. The likes of Amazon, Super Micro Computer and Apple rallied, although Alphabet finished down by 1.5% on the news that the Department of Justice is weighing up what would be a landmark ruling to force a breakup of the Google business given its market dominance.

"The minutes from the latest Federal Reserve meeting barely caused a ripple, mainly due to economic developments and comments since. Even so, the outsize 0.5% cut was agreed by the majority of the members, without necessarily committing the Fed to further reductions. Indeed, the current indications for a no-change decision in November have risen to around 20%, although at 80% the likelihood of a 0.25% cut remains in the driving seat. Hopes are high that today's consumer price index will further cement the feeling that the battle against inflation is largely won, with a gain of just 0.1% expected for September, annualised to 2.3%, with core inflation excluding energy and food remaining unchanged at 3.2%."

The US CPI for September is scheduled for release at 1330 BST.

In corporate news, GSK surged after agreeing to pay $2.2bn to settle about 80,000 Zantac lawsuits in the US.

In a statement released after the close of markets on Wednesday, the pharmaceuticals firm said it had reached an agreement with 10 firms who represent 93% of the Zantac (ranitidine) state court product liability cases pending against it in the US.

GSK also said it had agreed to pay $70m to resolve a whistleblower complaint by a laboratory called Valisure, which alleged that the pharmaceuticals company had defrauded the US government by concealing the cancer risks of heartburn drug Zantac for decades.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: "This is a significantly better outcome than initially expected, with some estimates standing at as much as $45bn just a couple of years ago."

Elsewhere, Tritax Eurobox ralied as Canadian investment firm Brookfield trumped Segro's effort to buy the warehouse owner with an agreed £557m offer. Brookfield is offering 69p a share, a 6% uplift on Segro's offer of 65.1p.

Volution Group gained as it posted a 6.1% jump in full-year group revenue and an 8.7% increase in adjusted pre-tax profit.

On the downside, Kingfisher, Tesco, Taylor Wimpey and WPP were all weaker as they traded without entitlement to the dividend.