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Highlights:
- FTSE 100 expected to rebound as investors focus on UK manufacturing data and Fed remarks.
- Mulberry rejected an £83 million takeover bid from Frasers Group, citing its long-term potential.
- Rio Tinto partnered with Green Lithium to develop a lithium supply chain for the UK and EU markets.
London stocks were poised to recover on Tuesday following a 1% decline in the previous session. The FTSE 100 was set to open up by around 25 points as investors digested remarks by Federal Reserve Chair Jerome Powell and awaited the latest UK manufacturing data. Monday's drop came after the UK’s second-quarter GDP was revised lower, contributing to market volatility.
Federal Reserve Chair Jerome Powell stated that the Fed is not rushing to cut interest rates, signaling the possibility of two more 25-basis-point rate cuts this year if the economy performs as expected. Powell also noted that future decisions will be made on a meeting-by-meeting basis. Meanwhile, Atlanta Fed President Raphael Bostic suggested a larger 50-basis-point rate cut could be on the table for November if job growth slows more than anticipated, though his baseline view remains for a gradual easing cycle.
On the UK front, the British Retail Consortium-NielsenIQ Shop Price Index revealed further deflation in shop prices, with a year-on-year decline of 0.6% in September, marking the steepest drop since August 2021. Non-food items saw the sharpest deflation, with prices dropping 2.1% compared to the same period last year. Investors were also focused on the upcoming S&P Global manufacturing PMI for September, due at 0930 BST.
In corporate news, luxury handbag maker Mulberry rejected an £83 million takeover offer from Mike Ashley’s Frasers Group, stating that the bid undervalued the company’s future potential. Frasers already holds a 37% stake in Mulberry and had offered 130p per share in cash following an emergency £10.75 million share placement by Mulberry to support its balance sheet after a full-year loss of £34 million.
British-Australian mining giant Rio Tinto announced a commercial partnership with UK-based Green Lithium to develop a lithium supply chain. The partnership will support Green Lithium’s plans to build a large-scale lithium refinery in Teesside, aimed at supplying lithium chemicals to the UK and EU markets. This move is expected to strengthen the automotive and battery manufacturing industries in both regions.
Endeavour Mining announced the appointment of Sonia Scarselli as executive vice-president of exploration, effective December. Scarselli, previously with BHP, will lead Endeavour’s efforts to discover up to 17 million ounces of resources by 2025, with 10 million ounces already identified. Her appointment brings female representation on the executive committee to 30%.
