FTSE 100 lower as Asian stocks fall on weak Chinese manufacturing data, Vertu warns of difficult first-half, Rightmove attracts takeover interest

“The FTSE 100 dipped on Monday after weak Chinese manufacturing figures put Asian stocks on the back foot overnight,” says AJ Bell Investment Director, Russ Mould.

“The world’s second largest economy may be trying to wean itself off its reliance on export demand by stoking domestic consumption. But this is proving a tricky process and exports were down for the first time in eight months amid weak consumer demand outside of China. This chimes with recent poor numbers from Temu-owner PDD.

“The US market may be closed for the Labor Day holiday today but later in the week things hot up, with the final non-farm payrolls release before the Federal Reserve meets in mid-September. The consensus is the central bank will, at that point, cut rates for the first time in this cycle.

“Friday’s jobs market reading may fuel or douse speculation over a bumper 50 basis point cut.”

“The standout name on the FTSE 100’s risers list was Rightmove which moved around 20% higher after Australian group REA confirmed it was considering a takeover of the property portal. This news breathed some life into the share price after a static period but don’t expect the company to be snapped up without a fight. Shareholders will be pushing for a generous deal and other potential bidders may throw their hat into the ring with rival proposals.”

Vertu

“It’s still a tough environment for car dealerships as pressured household budgets slam the brakes on demand for higher value sales of new and electric vehicles.

“This is reflected in the latest trading update from Vertu Motors, which saw the company issue what amounted to a mild profit warning for its full financial year – ‘broadly in line’ with expectations roughly translating as falling just short.

“Even this relies on a stronger second half showing after a weak first half – which could end up being akin to hoping to make up time on a journey back to London on the M25.

“More positively, used car sales are proving resilient and on new cars, Vertu is at least outperforming a miserable wider market.

“The company is also seeking to grow its aftersales business, which offers high margins and greater visibility. This is a sensible strategy but, in seeking to preserve profitability in this part of the business, Vertu has to be careful it is not perceived as ripping people off.

“All the while Vertu is contending with higher costs in areas like energy and wages. It is hoping to automate some administrative functions but we’re not yet at the point where a robot can fix your car at your local dealership.”

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