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FTSE 100 to advance cautiously ahead of retail sales and purchasing managers’ data

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Helped by a soft exchange rate, the FTSE 100 is set to open proceedings modestly firmer on Friday.

Spread betting quotes point to London’s index of leading shares rising 18 points to 5,804 following last night’s US presidential debate and ahead of the release of a slew of purchasing managers’ indices (PMis) today plus UK retail sales.

The market received an additional boost to sentiment with the news that the US Food and Drug Administration (FDA) has approved Veklury, the coronavirus (COVID-19) treatment from Gilead Sciences that was formerly known as Remdesivir.

“European stocks look set for cautiously higher open with the idea that the presidential debate won’t have diminished chances of a new US stimulus bill. The approval of Remdesivir by the FDA [Food and Drug Administration] as the first drug to treat COVID-19 is a big positive for markets beset by second wave concerns,” said LCG’s Jasper Lawler.

US markets put in a good shift yesterday with the Dow Jones rising 153 points to close at 28,364 and the S&P 500 climbing 18 points to 3,453.

Asian markets picked up the baton this morning, with Japan’s Nikkei 225 up 81 points at 23,555 and Hong Kong’s Hang Seng up 153 points at 24,939.

On the macroeconomic agenda today in the UK we have the retail sales figures for September and the “flash” PMIs.

“The latest retail sales numbers for September, which could well be a last hurrah ahead of what could well be a bleak autumn for the UK economy,” suggested CMC’s Michael Hewson.

“The big question as Q3 draws to a close is whether today’s September numbers can round off another month of gains as summer draws to a close. The prevailing thinking, if judged purely on the basis of recent PMI data would be in the positive; however, life is rarely that simple. Other retail sales surveys do offer some encouragement. The recent British Retail Consortium sales numbers for September showed a 6.1% rise, well above the 4.7% rise in August, driven largely by increased spending in pubs, as well as higher DIY spending and a back to school boost,” Hewson said, before noting “this could be as good as it gets for a while, as we head towards the potential for a train wreck in Q4, as new lockdown restrictions start to bite”.

“Expectations are for a rise of 0.4% [down from 0.6% in August], though it wouldn’t be a surprise to see that come in slightly higher,” he suggested.

As for the PMIs, the manufacturing number is expected to ease to 53.2 from September’s 54.1, which is still above the 50-point level that separates contraction from expansion, while economists have pencilled in a number of 53.4 for services, down from 56.1 in September.

Unusually for a Friday, the company results schedule is quite busy, with Barclays, London Stock Exchange Group and Intercontinental Hotels all releasing trading updates for the summer quarter.

READ Busy Friday ahead with Barclays, London Stock Exchange Group, Intercontinental Hotels on the schedule

Around the markets

  • Sterling: US$1.3061, down 0.23 cents
  • 10-year gilt: 0.286%, up 4.3 basis points
  • Gold: US$1,908.10 an ounce, up US$3.50
  • Brent crude: US$42.39 a barrel, down 7 cents
  • Bitcoin: US$12,953, down US$175

6.45 am: Early Markets: Asia / Australia

Shares in Asia-Pacific were mixed today as investors continued to monitor the COVID-19 pandemic, US stimulus talks and the final Trump-Biden election debate.

China’s Shanghai composite was 0.05% lower while Hong Kong’s Hang Seng index gained 0.44%.

In Japan, the Nikkei 225 rose 0.40% while South Korea’s Kospi was 0.40% higher.

Meanwhile, shares in Australia dipped below the flatline, with the S&P/ASX 200 down 0.11%.

READ OUR ASX REPORT HERE

Proactive Australia news:

Mali Lithium Ltd (ASX:MLL), which is soon to be renamed FireFinch, has received a response described as overwhelmingly positive to a $6 million share purchase plan (SPP), which closed heavily oversubscribed and raised around $9.835 million before costs.

Macarthur Minerals Ltd (ASX:MIO) (CVE:MMS) (OTCMKTS:MMSDF) has closed a well-supported private placement with subscriptions from institutional and sophisticated investors totalling 11,362,618 new shares for funds of almost A$6.25 million.

Kazia Therapeutics Limited (ASX:KZA) (NASDAQ:KZIA) (FRA:NV9M) has successfully completed the A$8.8 million retail component of its A$25.2 million entitlement offer of shares at 80 cents per new share.

Orion Minerals Ltd (ASX:ORN) (JSE:ORN) has started a new phase of high-impact exploration drilling targeting near-mine and regional VMS copper-zinc and nickel-copper targets at Prieska Copper-Zinc Project in South Africa’s Northern Cape.

Aspire Mining Ltd (ASX:AKM) remains committed to turning the Ovoot Coking Project in Mongolia into a first world development that will provide high-quality jobs and community benefits to ensure efficiency and mitigate environmental impacts.

TNT Mines Ltd (ASX:TIN) hit a new record high after signing a binding share sale agreement to acquire Warriedar Mining Pty Ltd, which owns the Eureka and Warriedar gold projects in Western Australia, both with a history of gold production.

VRX Silica Ltd (ASX:VRX) has received notice from the Yamatji Aboriginal Corporation (YMAC) that conclusive registration of the Yamatji Nation Indigenous Land Use Agreement (ILUA) is expected today, in accordance with the terms of the ILUA.

Australian Potash Ltd (ASX:APC) has welcomed the start of a detailed assessment and due diligence on the Lake Wells Sulphate of Potash Project (LSOP) by the Australian Federal Government’s export credit agency Export Finance Australia (EFA).

Fenix Resources Ltd (ASX:FEX) is making progress on its planned development of the Iron Ridge Iron Ore Project in Western Australia’s Mid-West, with production on track to start later this year.

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