- FTSE 100 set to open lower
- Ashtead is heading stateside
- Boohoo urges shareholders to reject Frasers’ board appointments
- Chinese stocks bounce on stimulus talk
- Oil dips as Syria concerns ease
Matt Britzman, senior equity analyst, Hargreaves Lansdown:
“The FTSE 100 opened lower this morning, handing back some of yesterday’s 0.6% gain. Yesterday’s rally was powered by mining stocks and fuelled by China’s promise of economic stimulus, including looser monetary policy and support for property prices. But as we’ve seen with mini-China rallies in the past, it seems the buzz is fading as investors take a step back to reassess the bigger picture.
Equipment rental giant Ashtead is packing its bags and heading stateside, dealing another blow to UK markets. The move had been whispered about for a while, despite Ashtead previously insisting there were no such plans. It’s a logical leap – most of its leadership is already US-based, and the States are its biggest market. There will still be a secondary listing in the UK, albeit with less stringent requirements than a full listing. As for today’s results, they were a letdown, missing expectations across the board and topped off with a guidance downgrade. Sluggish commercial real estate is still a drag, but investors can find a silver lining in easier comparable quarters on the horizon and the longer-term tailwind of mega projects in the US.
Boohoo is urging shareholders to reject Frasers Group’s demands to appoint Mike Ashley and Mike Lennon to the board, calling the move a self-serving power grab. The company argues these appointments would create conflicts of interest and could undermine shareholder value, drawing parallels to past Frasers’ actions that led to Studio Retail Group’s downfall. Boohoo’s board is instead focused on unlocking value, with actions like appointing a new CEO, identifying cost savings, and streamlining operations. That all sounds great, but after several missteps of late, shareholder confidence is hanging on by a thread.
Chinese stocks sizzled on Tuesday, with the Shanghai Composite and Shenzhen Component climbing over 1%, fuelled by the government’s pledge to ramp up fiscal measures and loosen monetary policy for 2025. The announcement highlighted plans to boost domestic demand and consumer spending, setting the stage for this week’s Central Economic Work Conference to unveil China’s big economic priorities. High-growth sectors like tech, consumer goods, and finance led the charge, and the rally wasn’t just local – UK companies with ties to China saw a boost too, proving the ripple effect of good news travels fast.
Oil prices are heading lower in early trading, with Brent crude settling near $71.7 per barrel as fears of turmoil in Syria eased. The rebel-led Salvation Government is taking the reins after capturing the capital, with plans to get banks and oil flowing again. Declines were cushioned by China’s promise of an economic jumpstart next year, and all eyes are now on US inflation data for a sneak peek at the Fed’s next move.”
