Investec flags higher earnings, AstraZeneca announces positive chemo trial results

London open

The FTSE 100 is expected to open nine points lower on Friday, having closed down 0.69% on Thursday at 7,678.62.

Stocks to watch

Investec on Friday said it expected to post higher earnings for the first half of the year, boosted by the now-completed merger of its UK wealth and investment business with Rathbones, higher global interest rates and growth in average lending books. Adjusted pre-tax operating for the six months to August 31 was expected to be in a range of £428.7m- £449.6m, compared with £405m a year ago. The UK business' adjusted operating profit is expected to be at least 25% higher than the prior period’s £174.4m.

AstraZeneca announced positive results from the TROPION-Breast01 phase three trial on Friday, where datopotamab deruxtecan showed significant improvement in progression-free survival compared to standard chemotherapy in patients with specific types of metastatic breast cancer. While there was a trend towards improved overall survival with datopotamab deruxtecan, data was not yet conclusive, and the trial would continue to assess this. The drug, jointly developed with Daiichi Sankyo, had a safety profile consistent with past tests.

Newspaper round-up

The pound dipped to its lowest level in six months, and bonds rallied after the Bank of England held borrowing costs steady for the first time since November 2021 in a finely balanced decision. Investors sold sterling after the announcement, pushing the pound 0.5 per cent lower against the dollar to $1.22, its weakest level since March. - The Times

Ten thousand fewer households a year will be able to claim heat pump grants from the Government after Rishi Sunak’s overhaul of the scheme, it has emerged. Just 20,000 households a year will be able to claim the Prime Minister’s more generous heat pump grants because the Government left a cap on the cost of the scheme unchanged. - Telegraph

The Brexit trade deal should not be reopened just to satisfy demands from some sectors of the UK and EU motor industry concerned about looming tariffs on electric cars, Thierry Breton, the influential European commissioner, has said. EU leaders have come under pressure to suspend 10% tariffs on electric car exports that are expected to begin in January under the Brexit treaty. - Guardian

Watford is to become the unlikely new home for Batman and Superman after Warner Bros confirmed that it is to go ahead with a huge expansion of its Leavesden film studios. The addition of ten new sound stages and 400,000 sq ft of production and support space will increase the filming capacity of the studios where the Harry Potter films were shot by 50 per cent. - The Times

Religious programmes could disappear from TV screens following an overhaul of UK broadcasting laws, MPs have warned. The Culture, Media and Sport (CMS) Committee said the new rules meant broadcasters, including the BBC, ITV, and Channel 4, may axe less commercially successful shows in areas such as religion, international matters and science. - Telegraph

Rupert Murdoch is stepping down as chair of Fox and News Corp – ending a seven-decade run as one of the world’s most transformative and controversial media moguls. In a note to staff first reported in the Murdoch-controlled Wall Street Journal, he wrote: “For my entire professional life, I have been engaged daily with news and ideas, and that will not change. But the time is right for me to take on different roles.” - Guardian

US close

US stocks dropped on Thursday, with the S&P 500 and Nasdaq both falling to their lowest levels since late June, as rising bond yields and hawkish comments from the Federal Reserve weighed on sentiment.

The Dow Jones Industrial Average finished down 1.1% at 34,070, the S&P 500 slipped 1.6% to 4,330 while the Nasdaq dropped 1.8% to 13,224. This was the S&P 500's lowest close since 26 June and the Nasdaq's lowest close since 7 June.

Stocks were extending their sell-off on Wednesday after the conclusion of the Federal Open Market Committee meeting. While the Fed left the Federal Funds Rate at the 5.25-5.5% range, the majority of voting members said another hike before the end of the year was probable.

The committee indicated that interest rates would only be lowered to around 5% by the end of 2024, suggesting they remain committed to a 'higher-for-longer' strategy.

Meanwhile, at a press conference following the meeting, chair Jerome Powell said he still needed to see "convincing evidence" that higher interest rates are having the desired effect on inflation before the FOMC can begin to loosen monetary policy.