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LONDON MARKET OPEN: Stocks up ahead of US GDP this afternoon

Investors in London bought at the open on Thursday, looking ahead to US GDP data this afternoon, while Anglo American shares jumped after it confirmed that it was ‘reviewing’ a takeover bid from its larger Australian rival BHP Group.

The FTSE 100 index opened up 33.81 points, 0.4%, at 8,074.19. The FTSE 250 was down 98.85 points, 0.5%, at 19,620.52, and the AIM All-Share was down 0.60 of a point, 0.1%, at 754.09.

The Cboe UK 100 was up 0.5% at 806.43, the Cboe UK 250 was down 0.5% at 16,979.96, and the Cboe Small Companies was down marginally at 15,317.25.

In European equities on Thursday, the CAC 40 in Paris was down 0.3%, while the DAX 40 in Frankfurt was down 0.1%.

All eyes are on US economic data. Thursday’s economic calendar has a GDP reading at 1330 BST.

‘A strong GDP reading would suggest that the US economy is sufficiently strong to support corporate earnings, but it could also delay expectations for a Fed rate cut. Conversely, a softer-than-expected GDP figure would likely increase expectations for a rate cut, especially if earnings disappoint due to inflated expectations,’ said Ipek Ozkardeskaya at Swissquote Bank.

‘Overall, I believe that a softer-than-expected GDP would elicit a more positive market reaction, but the risks surrounding GDP lean towards a better-than-expected reading.’

After the GDP reading, attention will quickly turn to personal consumption expenditure data, which is the Fed’s preferred gauge of inflation.

Friday’s US PCE reading is expected to show the annual core PCE inflation measure eased to 2.6% in March from 2.8% in February.

The pound was quoted at $1.2491 early on Thursday in London, higher compared to $1.2432 at the equities close on Wednesday. The euro stood at $1.0714, higher against $1.0687. Against the yen, the dollar was trading at JP¥155.65, up compared to JP¥155.06.

In the FTSE 100, Anglo American took the spotlight, jumped 13%.

The miner confirmed that it was ‘reviewing’ a takeover bid from its larger Australian rival BHP Group, in what would rank as one of the sector’s biggest deals in years.

Anglo American did not disclose the price of the ‘unsolicited’ offer, which must be sewn up before a deadline of May 22.

However, BHP subsequently said the offer values Anglo American’s share capital at £31.1 billion.

Australian-based BHP has a market value of around $148 billion, while London-based Anglo American has a market value of about $36 billion.

AstraZeneca rose 5.3%.

The pharmaceutical firm reported that revenue rose to $12.68 billion in the first quarter of 2024, up 17% from $10.88 billion a year earlier. Pretax profit jumped to $2.80 billion from $2.62 billion.

On the back of the results, Astra upped its dividend to $3.10 from $2.90.

In the FTSE 250, Inchcape edged 5.3% higher.

The London-based automotive distributor said revenue rose 5% on a reported basis to £2.3 billion in the first quarter of 2024. On an organic basis, the figure edged up 6% and at constant FX rates was 11% higher.

‘Our positive start to 2024 reflects the underlying quality of our business and we have confidence in, and we have reiterated, our outlook for the year,’ said Chief Executive Duncan Tait.

On the other hand, WH Smith lost 7.5%.

The London-based retailer, which operates on UK high streets and travel locations like airports and train stations globally, said revenue rose 8% to £926 million in the six months ended February 29, from £859m a year earlier.

Pretax profit, however, fell to £28 million from £45 million.

Looking ahead, WH Smith said it is on track to deliver full year results in line with expectations.

CEO Carl Cowling said: ‘The group is in its strongest ever position as a global travel retailer. We have had a good first half and our businesses are well positioned for the peak summer trading period.’

In the US on Wednesday, stocks on Wall Street were muted, with the Dow Jones Industrial Average closing down 0.1%, the S&P 500 rising marginally, and the Nasdaq Composite adding 0.1%.

After the closing bell in New York, Meta Platforms plunged 15% in after-hours trading.

Meta signalled higher-than-expected costs lay ahead as it ploughs more cash into artificial intelligence after reporting another bumper quarter.

The owner of Facebook and Instagram reported a double-digit increase in quarterly revenue, while profit more than doubled year-on-year in the first quarter. However, it increased guidance for full-year total expenses and capital expenditures, and warned that operating losses at Reality Labs would increase ‘meaningfully’.

Alphabet, Intel, and Microsoft are all due to report earnings on Thursday.

In Asia on Thursday, the Nikkei 225 index in Tokyo was down 2.2%. In China, the Shanghai Composite was up 0.3%, while the Hang Seng index in Hong Kong was up 0.4%.

In Sydney, financial markets were closed for Anzac Day.

Brent oil was quoted at $88.21 a barrel early in London on Thursday, up from $88.12 late Wednesday.

Gold was quoted at $2,320.70 an ounce, lower against $2,329.42.

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