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What to watch: LSE sells Borsa Italiana for £4bn, GDP growth slows, HSBC's green vow

·Finance and policy reporter
·4-min read
MILAN, ITALY - March 29, 2020: General view shows almost deserted piazza Affari ('Business Square'). In the background there is Palazzo Mezzanotte, the headquarter of Borsa Italiana, while in the foreground stands the statue L.O.V.E., also known as Il Dito ('The Finger'), by Italian contemporary artist Maurizio Cattelan. The Italian government imposed unprecedented restrictions to halt the spread of COVID-19 coronavirus outbreak, among other measures people movements are allowed only for work, for buying essential goods and for health reasons. (Photo by Nicol� Campo/Sipa USA)
Palazzo Mezzanotte, the headquarter of Borsa Italiana. Photo: Nicol� Campo/Sipa USA

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and around the world:

London Stock Exchange to sell Borsa Italiana to Euronext for €4.3bn

The London Stock Exchange Group (LSE) has agreed to sell Borsa Italia to French rival Euronext for at least €4.33bn (£3.95bn, $5.09bn).

The stock exchange operator announced the sale on Friday, and said it would also receive “an additional amount reflecting cash generation to completion.”

It had begun exclusive discussions with Euronext over a sale on 18 September.

LSE expects the sale of the Italian stock exchange in Milan will overcome a regulatory obstacle at EU level to its purchase of data firm Refinitiv.

"We continue to make good progress on the highly attractive Refinitiv transaction and we are pleased to have reached this important milestone. We believe the sale of the Borsa Italiana group will contribute significantly to addressing the EU's competition concerns,” said LSE’s CEO David Schwimmer.

GDP growth slows despite Eat Out to Help Out in August

The UK’s economic bounce back from COVID-19 continued to lose steam in August.

The Office for National Statistics (ONS) said on Friday that UK GDP grew by just 2.1% in August. Economists had been expecting monthly growth of 4.6%.

The figure, which is an early estimate and could be subject to revisions, shows momentum continues to slow. Output expanded by 6.6% in July and 8.7% in June, following a record 20.4% slump in the second quarter of 2020.

The slowdown came despite a boost for the hospitality sector through the government’s Eat Out to Help Out scheme. The meal subsidy programme helped boost output in the food and accommodation industry by a huge 71.4% in August.

While food and accommodation surged, most other sub-sectors of the economy struggled to register growth above 1%.

August marked the fourth consecutive month of growth in GDP but the UK economy remains around 9.2% below pre-pandemic levels.

HSBC pledges to go carbon neutral by 2050

HSBC (HSBA.L) has pledged to make all its operations carbon neutral by 2030 and make all its lending activities environmentally neutral by 2050.

The bank said on Friday it would make its operations and supply chain neutral on carbon emissions within the next 10 years. It will also align its lending and financing activities with the goals of the 2015 UN Paris Climate Agreement by 2050.

HSBC said it would help customers transition to carbon neutral business activities, pledging between $750bn and $1tn in financing for this push over the next decade.

READ MORE: Barclays among first banks to sign up to 'net zero' financing pledge

A report in March compiled by climate change activist groups found that HSBC had provided over $86bn of financing to companies involved in fossil fuels since 2015 when the Paris Agreement was signed.

Becky Jarvis, coordinator of Fund Our Future UK, a network of campaign groups, said: “HSBC’s net-zero commitment is a bit like saying you’ll give up smoking by 2050, but continuing to buy a pack a week, or even smoking more.”

Market rally continues on US stimulus hopes

European stock markets continued to rally on Friday, as investors’ hopes grew of a US stimulus package and a Joe Biden victory in the US election.

US futures were also pointing to a higher open, while Chinese stocks jumped overnight on better-than-expected services industry data.

The pan-European STOXX 600 (^STOXX) rose 0.3% on the open, reaching Its highest level since 18 September.

France’s CAC 40 (^FCHI) was up 0.6%, Britain’s FTSE 100 (^FTSE) was up 0.5%, and Germany’s DAX (^GDAXI) was trading 0.3% higher.

Wall Street also looked set for continued gains, as US president Donald Trump said “productive” stimulus talks had resumed just days after he scrapped negotiations.

S&P 500 (ES=F) and Dow Jones futures (YM=F) were up 0.4% as European markets opened, while Nasdaq (NQ=F) were up 0.3%.

Deutsche Bank analysts said in a note investors also had an “increasing focus on a potential Biden presidency and a possible blue wave.”

Watch: What is a V-shaped economic recovery?

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