The eurozone economy saw private sector activity fall for the first time since February, according to the HCOB Eurozone Composite PMI.

Germany, France and Italy shrank simultaneously for the first time this year as the figure dropped from 51 to 49.6. A reading below 50 indicates a contraction in output.

Spain was the only bright spot, climbing up to 57.

Dr Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said:

Ricardo Evangelista, senior analyst at ActivTrades, said:

The CEO of Nvidia (NVDA), Jensen Huang, said in an interview with CNBC on Wednesday that demand for its artificial intelligence (AI) chips was "insane".

Huang said Nvidia's AI Blackwell chips were in "full production", following much speculation about the production of the chips.

Shares were up 1.5% in pre-market trading on Thursday afternoon.

Huang was speaking alongside Accenture (ACN) CEO Julie Sweet, with the two businesses having announced details of their expanded partnership on Wednesday.

This included Accenture's formation of an Nvidia Business Group, which the professional services company said was aimed at helping businesses "rapidly scale their AI adoption".

Meanwhile, Nvidia was widely reported to be one of the investors in the $6.6bn (£5bn) new funding raised by Chat-GPT maker OpenAI, which the company said took its valuation up to $157bn.

Let's take a look at what's happening in equity markets this afternoon...

• Housebuilders were among the top performers, with Persimmon, Barratt, Taylor Wimpey and Vistry all up. The sector was boosted by rate cut hopes and data from Zoopla which showed that house sales rose in September at the fastest rate since the post-lockdown rebound.

• Tesco gained as it lifted its annual profit guidance despite a slight slowdown in underlying sales growth in the second quarter. Due to stronger-than-expected volumes in the first half, which the grocer put down to its ongoing investments in "value, quality and service", retail adjusted operating profit for the year ending 24 February was now expected to be £2.9bn, up from earlier guidance of at least £2.8bn and higher than last year's £2.76bn.

• Telecom Plus, which trades at Utility Warehouse, also advanced as it backed its full-year guidance and reported a rise in customer numbers.

• SSP Group was in the red as it said it expected to deliver a large jump in full-year profits, despite weaker trading in Continental Europe, especially in France where demand during the Olympics was lower than anticipated. The company, which operates food outlets at train stations and airports, said core profits for the year to September would come in at £350-360m, up from the £280m reported a year earlier and lower than planning assumptions of £375m at the top end.

• British Land lost ground after saying it had raised £301m in an equity placing to help fund the acquisition of a portfolio of seven "high quality" retail parks.

• Phoenix Group, Smith & Nephew, TBC Bank and Hargreaves Lansdown all fell as they traded without entitlement to the dividend.

The pound is now on track for its worst day in over 18 months, down almost 1.4% against the US dollar at $1.311, a drop of 1.5 cents.

It is so far the biggest one-day drop against the dollar since 7 March last year.

Sterling has also dropped as much as 1% to as low as €1.19.

The annual inflation rate in Turkey fell to 49.4% in September.

Despite the figure coming in higher than the 48.1% forecast from economists, the rate down from 52% in August.

Inflation increased 2.97% on a monthly basis in September, the TUIK statistics agency said.

Turkey’s central bank began to raise interest rates last year in an effort to battle soaring prices, after President Recep Tayyip Erdogan dropped his opposition to orthodox monetary policy.

Erdogan this week said inflation was on a downward trend.

The latest research by Zero Deposit, the tenancy deposit alternative, reveals that tenant demand for rental homes in England climbed by +1.7% between Q2 and Q3 2024, while demand since the start of the year has increased by +3.3%.

The latest index by Zero Deposit shows that: -

National picture

• Rental demand across England sat at 35.1% during the third quarter of this year, meaning that more than a third of all rental properties listed on the market had found a tenant.

• This marks a quarterly increase of +1.7% as well as a +3.3% increase since the start of 2024.

Quarterly movement

• West Midlands County recorded the largest quarterly increase of all English counties, with rental demand climbing by +5.6% between Q2 and Q3 2024.

• The second-largest tenant demand increase was recorded in Leicestershire (+5.2%), with West Yorkshire (+4.5%), Greater London (+4.1%), and Devon (+4%) completing the top five for quarterly growth.

England’s hottest and coldest rental markets

• England’s hottest rental market right now is West Sussex where tenant demand of 55% is highest across all counties for Q3 2024.

• In Wiltshire, 50.1% of all rental properties have secured tenants, while demand is also strong in Hertfordshire (48.4%), Somerset (47.6%), and Cambridgeshire (47.4%)

• However, rental demand in some counties is lagging severely behind.

• In Nottinghamshire, just 20.8% of all rental properties have been successfully let, while demand is also particularly low in East Riding of Yorkshire (25.3%) and the City of London (26.2%).

Tesco has revealed that sales grew 4% to £31.5bn over the 26 weeks to 24 August, compared with the same period last year. It now expects to make profit of £2.9bn for the year, up from £2.8bn previously predicted.

The supermarket chain said it will make £100m more than expected after it took market share from rivals by cutting its prices. The grocer also put more staff on the shop floor and used AI to target ranges to local tastes.

Tesco made £260m of cost savings in the six months period and also benefited from restructuring its ban.

An increase in the volume of sales, particularly across fresh food, helped push up the overall figure, meaning people were putting more items in their baskets.

It also announced a nearly 15% increase in the volume of sales of its “Tesco Finest” premium range, compared with the same period last year.

The retailer said 20 million more people had bought its Finest premium own-label range.

Kathleen Brooks, research director at XTB said:

The dollar hit more than a six-week high versus the yen on Thursday as robustness in the US jobs market increased bets that the Federal Reserve will not rush to cut interest rates.

In contrast the pound tumbled to a two-week low on the back of Andrew Bailey's comments on more aggressive rate cuts.

The euro slid to a three-week trough after normally hawkish European Central Bank (ECB) policymaker Isabel Schnabel took a dovish tone on inflation, cementing bets for a rate cut this month.

The yen has come under selling pressure since Japan’s new prime minister said on Wednesday, following a meeting with the central bank governor, that the country is not ready for additional rate hikes.

In the meeting between Ishiba and Bank of Japan governor Kazuo Ueda, both officials indicated that the central bank did not view further rate hikes as suitable for the economy at this time. That prompted a flurry of selling of yen.

Bank of England (BoE) governor Andrew Bailey has said Threadneedle Street could become a “bit more aggressive” and “a bit more activist” in its approach to cutting interest rates if the news on inflation continued to be good.

In an interview with the Guardian newspaper, Bailey said he was encouraged by the fact that cost of living pressures were not as persistent as the central bank feared they might be.

He added that the monetary policy committee was also closely watching developments in the Middle East amid fears of a fresh oil price shock.

The bank is next scheduled to set interest rates in early November and money markets suggest there is an 88% chance of a cut to 4.75%.

Lower mortgage rates have boosted buyer demand and property sales in the UK, with most sellers accepting more than a 5% discount to secure a sale.

UK house prices have risen 0.7% in August to an average of £267,100 as buyers take advantage of the lowest mortgage rates, according to the latest House Price Index from Zoopla.

Buyer demand and sales agreed have surged more than 25% year-on-year, as households that previously hesitated re-enter the market.

The report showed that increasing supply will likely keep house price inflation in check, as many of the new listings are from homeowners looking to upgrade or relocate. Approximately 37% of transactions are occurring at prices more than 5% below initial asking prices, reflecting buyers' price sensitivity amidst the expanding choices available.

Sales activity has increased significantly across various regions, with the East Midlands experiencing a 32% rise and the North East seeing a 30% increase. Overall, the number of homes sold has risen by over 10% nationwide.

With this renewed buyer interest, the number of properties listed for sale has also seen a boost, climbing 12% as sellers, including homeowners and investors, capitalise on falling mortgage rates and anticipated tax changes.

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Stocks in Asia were mixed overnight with the Nikkei (^N225) rising 2% on the day in Japan, following a rollercoaster few days in Tokyo after new prime minister Shigeru Ishiba dampened speculation over an interest rate hike.

The dollar gained against the Japanese yen helping push Tokyo’s index higher. It gained 2.2% to 38,655.03, while the dollar traded at 146.80 Japanese yen, up from 146.41 yen late Wednesday.

The dollar had been trading around 142 yen after the ruling Liberal Democrats chose Shigeru Ishiba to head the party and succeed Fumio Kishida as prime minister. Ishiba had expressed support for the central bank’s recent moves to raise its near-zero benchmark interest rate, which stands at around 0.25%. That led traders to bet that the yen would gain in value.

But after a meeting between Ishiba and Bank of Japan governor Kazuo Ueda, both officials indicated that the central bank did not view further rate hikes as suitable for the economy at this time. That prompted a flurry of selling of yen.

Meanwhile the Hang Seng (^HSI) fell 1.3% in Hong Kong after a weeklong surge in which they soared around 20%. The Shanghai Composite (000001.SS) was still closed for a national holiday.

Across the pond on Wall Street, the Dow Jones (^DJI) rose 0.1%, to 42,196.52, and the S&P 500 (^GSPC) was flat, closing at 5,709.54. The tech-heavy Nasdaq Composite (^IXIC) rose 0.1% during the session to end at 17,925.12.

In the bond market, the yield on benchmark 10-year US Treasury notes rose to 3.78%, from 3.74% late on Tuesday.

Good morning, and welcome back to our markets live blog. As usual we will be taking a deep dive into what's moving markets and happening across the global economy.

Here's a quick look at what's on the agenda for today...

• 7am: Trading updates: Tesco, Galliford Try

• 9am: Eurozone services PMI index for September

• 9.30am: UK services PMI index for September

• 10am: Eurozone producer prices index for August

• 12.30pm: Challenger survey of US job cuts for September

• 1.30pm: US weekly jobless claims report

• 3pm: US Factory Orders