Incoming UK PM Rishi Sunak makes first speech
Rishi Sunak said he was “honored” and would serve with “integrity and humility” in his first speech since it was announced he would be the next U.K. prime minister.
Sunak was elected leader of the Conservative Party by fellow Conservative members of parliament at 2 p.m. London time. As the party with the most MPs following the 2019 general election, he will now be sworn in as the nation’s leader.
“The United Kingdom is a great country but there is no doubt we face a profound economic challenge. We now need stability and unity and I will make it my utmost priority to bring our country together,” he said.
“Because that is the only way we will overcome the challenges we face and build a better, more prosperous future for our children and our grandchildren.”
Sterling was flat against the dollar following the remarks, and the FTSE 100 remained up 0.4%.
— Jenni Reid
Pound choppy, gilt yields lower as Sunak announced as new UK PM
Rishi Sunak has been named as the U.K.’s new prime minister, after beating competitor Penny Mordaunt in the country’s fast-tracked leadership race.
Hollie Adams | Getty Images News | Getty Images
The British pound was 0.1% higher than the dollar at 3 p.m. London time, one hour after it was announced that Rishi Sunak would be the new U.K. prime minister.
It was 0.2% down against the dollar earlier in the afternoon.
Gilt yields fell sharply, with the benchmark 10-year yield down 25 basis points and the 2-year yield down 26 basis points. Yields move inversely to prices.
Volatility in the U.K. sovereign bond market, sparked by outgoing PM Liz Truss’ budget announcement one month ago, was a key reason she was pushed into resigning by her party late last week.
Sunak was finance minister under Truss’ predecessor Boris Johnson and was widely considered a market-friendly candidate — though analysts say he will face a tough job with the U.K. facing a recession and energy crisis and with many viewing the country’s economic credibility as damaged.
“The fall in gilt yields on the news today that Rishi Sunak will become the U.K.’s next prime minister has reduced the chances of a significant fiscal consolidation,” said Ruth Gregory, senior U.K. economist at Capital Economics. “Even so, the new PM will still have to work hard to restore stability in the eyes of the financial markets.”
— Jenni Reid
Prosus sinks 14% on China growth concerns
Education group Pearson up 8% after ‘outstanding’ English language learning growth
Shares of Pearson were up 8% Monday after the company reported 7% growth in underlying sales in the last nine months, beating market expectations.
The education company said an “outstanding” performance in English language learning helped deliver the results, with English courses reporting 28% growth.
Higher education was down 4%, which was in line with company expectations.
— Hannah Ward-Glenton
UK 10-year gilt yield drops as UK set to get new PM
U.K. 10-year gilt yields are trading at their lowest level since the mini-budget, which threw the markets into turmoil on Sept. 23.
The move comes as former Finance Minister Rishi Sunak looks set to become the new prime minister.
10-year yields traded almost 21 basis points lower at 3.846% around 9 a.m. London time.
European markets: Here are the opening calls
European indexes are expected to open higher this morning, with the U.K.’s FTSE up 23 points to 6,992, Germany’s DAX up 130 points to 12,846, France’s CAC up 50 points to 6,079 and Italy’s MIB up 221 points to 21,647.
CNBC Pro: Oil could rise or fall — and these energy stocks are winners either way, portfolio manager says
Whether oil prices rise or fall, energy stocks are still worth investing in, according to Foord Asset Management’s Brian Arcese.
He names a couple of his favorite energy stocks, including one that he says will generate a “significant amount of cash” if oil prices stay high.
CNBC Pro subscribers can read more here.
— Weizhen Tan
Hong Kong stock movers: Tech drags down the broader index
Chinese tech companies dragged down the broader Hang Seng index in morning trade, with heavyweights such as Tencent and Alibaba dropping around 6% each.
Meituan shed 4.87%, while JD.com declined around 6% as well.
The Hang Seng Tech index was 3.49% lower, and the Hang Seng last lost 2.73%.
— Abigail Ng
Big tech earnings reports coming up this week
A slew of big tech names report third quarter earnings this week. Because of the size of many of these companies’ market capitalizations, any moves after earnings will likely impact the entire market.
Alphabet and Microsoft report earnings on Tuesday, followed by Meta Platforms on Wednesday. Apple and Amazon will report Friday.
—Carmen Reinicke
Stock futures rise Sunday evening
Stock futures rose Sunday evening as Wall Street looks to continue its best week since June amid third quarter earnings season.
Futures tied to the Dow Jones Industrial Average gained 289 points, or 0.93%, just a few minutes after the start of futures trading Sunday. S&P 500 futures rose 1.18% while Nasdaq 100 futures climbed 1.37%.
—Carmen Reinicke
Read More: Europe markets close 1.4% higher as utilities lead gains; Rishi Sunak to be new UK PM