Murdoch’s REA raises Rightmove bid to £6.2bn; China stocks head for best week since 2008

Key events

Consumer confidence in the eurozone has worsened.

The economic sentiment indicator dropped from 96.5 to 96.2 in September.

ING economist Bert Colijn has also looked at this morning’s inflation data from Spaina and France, and what this means for interest rates in the eurozone.

Weaker growth prospects and easing inflation concerns show a clear turning in eurozone sentiment at the moment, which adds dovish pressure on the ECB.

Inflation prints for Spain and France have come in very soft this morning, likely resulting in a first sub-2% eurozone inflation print for September. While this is related to base effects and inflation is expected to tick up again towards the end of the year, the question is by how much this can happen. Petrol prices have dropped significantly in recent weeks on the lower oil price, which limits the prospects of a headline inflation rebound. For the European Central Bank, a lot of focus will be on whether core inflation will come down though, with services inflation as its main concern.

All main eurozone surveys for September have now come in weak and this means that with inflation relatively benign, the focus of policy makers is shifting from inflation to growth worries at this point. For the ECB, this means that the pressure to lower interest rates from current restrictive levels quickly will increase.

German unemployment rises; ECB October rate cut back on table

In Germany, unemployment rose more than expected this month.

The seasonally adjusted number of unemployed people increased by 17,000 to 2.82 million, while economists had expected the figure to rise by 12,000.

Without the adjustment, unemployment fell by 65,600.

Carsten Brzeski, global head of macro at ING, said:

Looking ahead, the gradual weakening of the labour market looks set to continue. Recruitment plans in both industry and services have already fallen to the lowest level in a year. Also, the number of vacancies is gradually coming down…

Let’s not forget that the labour market is always a lagging and not a leading indicator. For the European Central Bank, today’s German labour market data ends a week which has brought a rate cut at the October meeting back on the table.

When leading indicators like this week’s PMIs and Ifo index as well as lagging indicators like today’s German labour market data and actual inflation data out of France and Spain all point to weak growth and faster disinflation, ECB doves will clearly be flying high.

Murdoch’s REA raises Rightmove bid to £6.2bn

Billionaire Rupert Murdoch’s REA Group has made a fourth proposal to buy the British property portal Rightmove for £6.2bn, and urged the Rightmove board to “engage now”.

REA, which has been rejected three times, improved its cash and shares offer to 781p a share, from 770p a share on Monday which valued the company at £6.1bn.

The Australian company is also requesting an extension of the Monday deadline by which it has to make a firm offer or walk away for six months.

REA, which is majority-owned by Murdoch’s News Corp, reiterated its “disappointment and surprise” at the repeated rejections of its prior proposals by the Rightmove board. Its bosses have gone directly to Rightmove shareholders to persuade them to back the deal. REA urged investors to “use what little time remains ahead [of the Monday deadline] to make their views known to the board of directors of Rightmove”.

REA said it had repeatedly requested meetings with Rightmove but “no meetings have taken place and as such there has been no substantive engagement beyond cursory procedural telephone calls with the Rightmove chairman”.

Owen Wilson, REA’s chief executive, said:

While the Rightmove board has refused to meet with us, we have enjoyed the opportunity to connect with Rightmove shareholders and to share our vision for the combination of the no. 1 digital property businesses in the UK and Australia.

We continue to see the potential for us to strengthen Rightmove and accelerate its growth. This is a compelling opportunity to create a true global technology leader on the London market via a secondary listing, operating in two of the most attractive markets in the world.

The full story on the Telegraph auction is here:

Telegraph auction: owners of New York Sun and Spectator the frontrunners

Mark Sweney

Potential suitors to buy The Daily and Sunday Telegraph have until the end of Friday to submit second round offers with the US owner of the New York Sun and Sir Paul Marshall, the backer of GB News and the new owner of The Spectator, viewed as the frontrunners to win the auction.

Marshall, who earlier this month sealed a £100 deal to buy the Spectator magazine, is leading a consortium backed by Ken Griffin, the US billionaire founder of the Citadel hedge fund.

Earlier this week, The Spectator appointed former cabinet minister Michael Gove as its new editor, taking over from Fraser Nelson who has held the role since 2009.

Marshall has widely been considered the frontrunner to win the auction, however there are at least four known suitors expected to submit bids ahead of the deadline.

The bidding war to buy the Telegraph newspaper business is moving nearer to its conclusion amid the latest deadline for takeover offers. It is understood at least three parties, including both UK and international firms, are in the frame to buy the business. It is the latest stage of a twisting ownership process for the historic London-based publisher. Photograph: Jonathan Brady/PA

Earlier this month British-born Dovid Efune, who took control of the digital assets of the right-leaning former print newspaper The New York Sun three years ago, emerged as a serious rival contender.

Efune, who has reportedly secured the backing of institutions including US investment funds Oaktree and Hudson Bay Capital, the family office of hedge-fund manager and philanthropist Michael Leffell and the investment arm of the Canadian developer Beedie.

Several sources believe that Efune, a former editor of the Jewish publication the Algemeiner Journal, may have the edge over Marshall as he does not control any UK media assets that may spark political and regulatory investigations.

Inflation slows in France and Spain

Inflation in France and Spain has slowed more than expected, according to the latest data.

The annual inflation rate in France fell to 1.2% in September from 1.8% in August, led by a decline in energy costs, and lower than market expectations of 1.6%.

In Spain, inflation dropped to 1.7% from 2.4% in August, lower than the 1.9% forecast by analysts. Falling fuel prices were the main factor, while food and electricity costs also aided the decline, the national statistics office said.

Eurozone government bond yields fell after the figures were released, with Germany’s 10-year bond yield (or interest rate) dropping to 2.1%.

Markets are now pricing in a chance of more than 70% that the European Central Bank will cut interest rates by a quarter point next month. This is up from 20% early this week.

Oil prices were down again earlier but have just edged up by 0.1% to $71.71 a barrel for Brent crude and to $67.80 a barrel for US crude, the global benchmarks.

Brent has lost nearly $4 a barrel this week, as talk that Saudi Arabia had abandoned its $100 price target continues to swirl around the market ahead of planned production increases later in the year.

Global markets set to end September on a ‘sparkling note’

UK stocks have opened a touch higher, following further strong gains in Asia and on Wall Street, where the S&P 500 hit a fresh high on Thursday.

Stocks were boosted by relief that weekly US jobless claims came in better than expected and second-quarter GDP growth held firm at 3%.

The FTSE 100 index in London edged up by 0.1% to 8,299 while the French and Italian markets rose by 0.3%, and Germany and Spain were flat.

Richard Hunter, head of markets at interactive investor, said

Global markets are set to end September on a sparkling note, with the Chinese authorities finally stepping up to the plate and with the main US indices continuing to test new record highs.

Derren Nathan, head of equity research at Hargreaves Lansdown, said:

Semiconductor stocks rallied led by US memory chip maker Micron’s surge of 14.7% [last night] after it released revenue guidance above market forecasts. This saw the optimism spread eastwards with Korean rivals Samsung and SK Hynix also seeing strong gains, topping off a strong week for Asian equities where a stimulus blitz unveiled by China’s government and central bank has seen Chinese equities enjoy their best week in over 15 years.

It’s been quite the come back with September almost completely reversing the double-digit losses endured over the previous 12 months. Only time will tell if this monetary experiment will see China return to its long-term growth trajectory.

In Japan, it’s been confirmed that Shigeru Ishiba will become the next prime minister after a nail-biting contest for the leadership of the ruling Liberal Democratic Party.

The Nikkei index jumped by 2.3% and the yen bounced back by 1% versus the dollar, and Nathan said “market confidence is no bad omen for the new man at the helm”.

Introduction: Chinese stocks on track for best week since 2008 after Beijing stimulus

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Chinese stocks are on track for their best week since 2008, after a blitz of stimulus measures aimed at the faltering economy.

The CSI 300 index rose by 3.5% today and is heading for a weekly gain of around 15%. Hong Kong’s Hang Seng index gained 2.7% and is on track for a near-13% weekly rise, its biggest since 1998.

An index of mainland Chinese property stocks is up 20% this week, and metal prices also rallied, including iron ore, copper, gold and silver. Investors are betting that the stimulus, which included interest rate cuts and support for the property market, will revive the latter and the wider economy.

After today, Chinese markets will be closed for a week-long public holiday.

Tin Lu, chief China economist at Nomura, said:

Beijing seems finally determined to roll out its bazooka stimulus in rapid succession… Beijing’s recognition of the severe situation of the economy and lack of success in a piecemeal approach should be valued by markets.

But eventually it is still necessary for Beijing to introduce well-thought policies to address many of the deep-rooted problems, particularly regarding how to stabilise the property sector, which is now in its fourth year of contraction.

The Japanese yen fell by 1% to three-week lows amid a leadership contest in the country. It has just been announced that former defence minister Shigeru Ishiba won the race to lead Japan’s ruling Liberal Democratic Party and will replace the prime minister, Fumio Kishida, as the country’s next leader.

The Agenda: