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London pre-open: Stocks to slip early on

By Benjamin Chiou

Date: Friday 22 Sep 2023

(Sharecast News) - UK stocks were expected to slip again on Friday on a busy day for economic data as investors continue to digest central bank decisions across the globe.
Futures were pointing to a 0.3% fall on the FTSE 100 in pre-market trade after a tumultuous week for markets, which saw policymakers in the US and UK hold interest rates steady but give hawkish outlooks with inflation still well above the target range. A total of six of the G10 central banks reported monetary policy decisions this week.

Markets in the US slumped on Thursday, with the S&P 500 and Nasdaq both dropping to a three-month low, as rising bond yields cemented expectations that monetary policy would stay tighter for longer.

The yield on a 10-year US Treasury briefly surpassed the 4.5% level, its highest since 2007, while two-year yields were at their highest since 2006, and the 30-year yield rose to its 2011 high.

Friday sees the release of a host of purchasing managers' indices (PMIs) from Germany, the UK and the US.

Other data revealed that UK retail sales rebounded in August from the rain affected prior month, rising 0.4% on the back of strong food and clothing purchases by consumers. This was an improvement from the 1.1% decline in July but slightly below the 0.5% increase expected by analysts.

Meanwhile, the GfK Consumer Confidence Index increased four points to -21, the highest reading since January 2022.

In company news, Investec on Friday said it expected to post higher earnings for the first half of the year, boosted by the now-completed merger of its UK wealth and investment business with Rathbones, higher global interest rates and growth in average lending books. Adjusted pre-tax operating for the six months to August 31 was expected to be in a range of 428.7m- 449.6m, compared with 405m a year ago.

AstraZeneca announced positive results from the TROPION-Breast01 phase three trial on Friday, where datopotamab deruxtecan showed significant improvement in progression-free survival compared to standard chemotherapy in patients with specific types of metastatic breast cancer. While there was a trend towards improved overall survival with datopotamab deruxtecan, data was not yet conclusive, and the trial would continue to assess this. The drug, jointly developed with Daiichi Sankyo, had a safety profile consistent with past tests.

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