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On Wednesday, the FTSE 100, the leading stock index in the UK, fell, ending a consecutive five-day rally. The decline was largely attributed to a dip in AstraZeneca’s shares after a revision of its target price. At the same time, investors were assessing local economic data along with remarks from Bank of England Governor Andrew Bailey about possible interest rate reductions. Bank of England Governor Andrew Bailey highlighted that interest rates are expected to be gradually reduced next year, pointing out that the decrease in inflation is well-established. The Bank is expected to keep interest rates at 4.75% this month, with projections indicating around 78 basis points in cuts by the end of next year. Following the Financial Times report on Bailey’s remarks regarding four anticipated interest rate reductions for next year, the pound experienced a decline. The UK’s prominent services sector saw a slowdown in November, although the decline was less pronounced than expected. According to a survey, this moderation can be attributed to an impending rise in employer taxes, which has influenced companies’ hiring strategies.
Single Stock Stories:
Shares of AstraZeneca have dropped 2.6%, making it the largest percentage loser on the FTSE 100 index. The pharmaceutical company has appointed Iskra Reic as the new executive vice president-international, a role that was previously occupied by Leon Wang. Leon Wang, who also serves as the head of China for AZN, is currently in detention and under investigation in the country, with details of the inquiry remaining undisclosed. Earlier today, HSBC analysts reduced their target price for AZN from 14,070p to 13,720p, while still maintaining a “buy” rating. Out of 26 analysts, 18 have rated the stock as “buy” or higher, and 8 have given it a “hold” rating, with a median target price of 14,000p according to LSEG data. AZN is now down 0.9% year-to-date after reaching record highs in late August and early September.
Centrica’s shares increased by 1.1% following the announcement that it will extend the operational lifespan of four nuclear power stations in collaboration with EDF. Heysham 1 and Hartlepool will have their service extended by one year until March 2027, while Heysham 2 and Torness will see a two-year extension to March 2030. This decision is expected to add approximately 9 TWh to electricity generation. Year-to-date, Centrica’s stock is down by about 7%.
Shares of Learning Technologies Group rose 7%, their highest since June 2023, as the company agrees to be acquired by U.S. private equity firm General Atlantic for about £802.4 million ($1.02 billion). The 100p per share offer is a 34% premium over the closing price of 74.9p on Sept. 26. LTGL’s independent directors plan to recommend the deal to shareholders. The stock is currently up 6%, with YTD gains of approximately 20%.
Technical & Trade ViewFTSE Bias: Bullish Above Bearish below 8225
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