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On Friday, London stocks declined following the trend of global markets, as U.S. Federal Reserve officials suggested that interest rates could remain elevated for an extended period. Additionally, GSK saw a decrease in its stock value after selling off its remaining shares in consumer healthcare firm Haleon. The FTSE 100 index, which represents the top 100 companies on the London Stock Exchange, dropped by 0.3% and was also on track to end three consecutive weeks of gains.

Market participants are factoring in approximately 47 basis points of monetary policy easing from the Federal Reserve this year. A rate reduction in November is fully anticipated, and there is a potential for around 60 basis points of cuts by the Bank of England in 2024, starting with the first cut in August.

Haleon's stock price drops as GSK sells its remaining 4.2% stake in the company at a discount. The shares fell by as much as 1.7% to 326.8p, while GSK's stock also decreased by 0.7% to 1,777.5p. The British drugmaker sold approximately 385 million shares at 324 p each, which is a 2.5% discount to HLN's last closing price, raising $1.5 billion. This sale is part of GSK's series of disposals of its HLN stake over the past year, totaling proceeds of 3.9 billion pounds. Despite this, HLN's stock has risen by approximately 3% this year, while GSK's stock has increased by around 22%.

Auto Trader, a UK-based online car marketplace, saw its shares drop by 4.6% to 719.6 pence, marking its largest one-day percentage decline since March 26. This makes it the top loser on the FTSE 100 index. The decrease in value came after analysts at Morgan Stanley reduced the price target for Auto Trader from 625 pence to 600 pence and downgraded its rating from "equal-weight" to "underweight." The brokerage firm highlighted that the company's 'Deal Builder' service is not expected to drive significant growth for another 1-2 years, although they acknowledged the long-term potential of this service. As a result, Morgan Stanley revised its net revenue estimates by 0-1% and EBIT estimates by 1-6% for the fiscal years 2024-2026. According to LSEG data, out of 19 analysts, eight rate the stock as "buy" or higher, eight as "hold," and three as "sell," with a median price target of 714.5. Despite the recent decline, the stock is still up by 4.7% year-to-date as of the last close.

Chancellor Jeremy Hunt stated that if shareholders accept the offer, Royal Mail's takeover will be analysed from a national security perspective. Czech billionaire Daniel Kretinsky is close to acquiring the postal service's parent company for £3.5 billion with a favourable response from management to his improved offer. Hunt welcomed international investment in British companies, emphasising the openness to companies from overseas. He also highlighted the importance of expertise and funding brought in by foreign investment. However, he emphasised the need to consider national security in any bid for Royal Mail to ensure no risks to core infrastructure.

FTSE Bias: Bullish Above Bearish below 8389

• Below 8300 opens 8050
• Primary support 8200
• Primary objective 8573
• 5 Day VWAP bullish
• 20 Day VWAP bullish

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