The FTSE 100 was broadly flat on Monday as investors continued to assess the implications of the Federal Reserve beginning to cut interest rates last week.
The Federal Reserve’s decision to cut interest rates by 50bps dominated markets last week, and after a strong rally in US stocks, investors were still adjusting to a new world of lower rates and running scenarios for stocks going into the end of the year.
Investors had an additional monetary policy easing to consider on Monday after China cut its repo rate to help stimulate the economy.
“The 10bps cut is aimed at encouraging banks to lend more freely,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.
“While it’s not a major move, it came alongside the news that a press conference will be held by the governor of the People’s Bank of China, focusing on financial support for economic development. Expectations are rising that another cut to interest rates could be on the way, to try to help China achieve its growth targets.”
Despite the cut to the Chinese, some China-focused stocks were actually down. Rio Tinto was in the read but Antofagasta managed to carve out gains.
Prudential and HSBC cheered the news are were higher on the session.
Rightmove was among the top risers after REA Group upped its offer for the property portal. Rupert Murdoch’s REA Group had its initial offer rejected but has shown a willingness to get the deal done by coming with a revised bid of 770p comprise of cash and shares.
“Australia’s REA has shown its determination to gain a big foothold into the UK property search market by significantly upping its takeover bid for Rightmove,” Streeter said.
“The group is frustrated by a lack of engagement from Rightmove which has clearly been holding out for a much higher offer after the first highly opportunistic bid. It’s now been increased by 9.2% which represents almost a 40% premium to its share price at the end of August. While this will certainly be very encouraging for some investors, who had seen the value of their holdings plummet from highs reached in January 2022, there is likely to be a push among others to hold out for an even better deal.”
Rightmove shares were 2.9% higher at the time of writing.