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London open: Stocks rise ahead of Yellen testimony
London stocks rose in early trade on Tuesday as investors awaited a testimony on stimulus by incoming US Treasury Secretary Janet Yellen.
At 0900 GMT, the FTSE 100 was up 0.5% at 6,754.49.
Spreadex analyst Connor Campbell said: “Janet Yellen’s claim that the US needs to ‘act big’ with its Covid-19 stimulus has re-heated the markets hopes for the Biden administration’s relief package.
“The former Fed chair, and soon-to-be Treasury Secretary, is set to face the Senate Finance Committee this evening, and has stressed in her prepared statement that the ‘smartest’ thing to do is aggressively pursue the previously announced $1.9 trillion plan.
“How Yellen fares this evening will give the markets – and the incoming administration – an early indication of the resistance to the package, and what can be expected from the first few weeks of Biden’s tenure.
“Following a very quiet Monday, Yellen’s comments have acted as a reminder that stimulus is incoming, in some form, allowing for a more positive start to Tuesday’s trading.”
In equity markets, Rolls-Royce was the standout gainer following an El Economista report that Carlyle, CVC and KKR are among bidders for the engine maker’s ITP Aero business.
Credit-checking firm Experian gained as it said its third-quarter performance was better than it had expected, with organic revenue growth of 7% despite the pandemic.
Investment platform AJ Bell was boosted by an upgrade to ‘hold’ from ‘sell’ at Berenberg.
Airlines were also in the black, with British Airways parent IAG and budget carrier easyJet both flying higher.
On the downside, electrical retailer AO World slumped despite posting a 67% rise in UK third quarter revenues as locked consumers bought more goods online during the coronavirus pandemic. Traders pointed to the fact that AO highlighted “significantly higher” costs due to the pandemic.
Outside the FTSE 350, fashion brand Superdry tumbled after it warned over its ability to continue as a going concern, reporting a widening of its interim losses and a slump in revenue as it took a hit from the Covid crisis and related store closures.
Top 10 FTSE 100 Risers
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| 76.4% of retail CFD accounts lose money. | |
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Easyjet Plc | +4.85% | +39.60 | 855.60 |
| 2 |  |
Rolls-royce Holdings Plc | +4.32% | +4.50 | 108.75 |
| 3 |  |
Micro Focus International Plc | +2.88% | +11.80 | 422.00 |
| 4 |  |
Centrica Plc | +2.54% | +1.26 | 50.78 |
| 5 |  |
Hsbc Holdings Plc | +2.32% | +9.35 | 412.35 |
| 6 |  |
Smith & Nephew Plc | +1.91% | +30.00 | 1,599.50 |
| 7 |  |
International Consolidated Airlines Group S.a. | +1.71% | +2.75 | 163.65 |
| 8 |  |
Berkeley Group Holdings (the) Plc | +1.39% | +62.00 | 4,529.00 |
| 9 |  |
Intercontinental Hotels Group Plc | +1.34% | +64.00 | 4,852.00 |
| 10 |  |
Glencore Plc | +1.19% | +3.30 | 280.15 |
Top 10 FTSE 100 Fallers
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| 76.4% of retail CFD accounts lose money. | |
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Next Plc | -2.05% | -166.00 | 7,934.00 |
| 2 |  |
Ocado Group Plc | -1.79% | -46.00 | 2,531.00 |
| 3 |  |
Ferguson Plc | -1.52% | -138.00 | 8,950.00 |
| 4 |  |
Standard Chartered Plc | -1.45% | -7.10 | 483.80 |
| 5 |  |
Smith (ds) Plc | -1.41% | -5.50 | 384.10 |
| 6 |  |
Flutter Entertainment Plc | -1.39% | -205.00 | 14,585.00 |
| 7 |  |
Barclays Plc | -1.32% | -2.00 | 149.32 |
| 8 |  |
Kingfisher Plc | -1.27% | -3.40 | 265.30 |
| 9 |  |
Halma Plc | -1.18% | -30.00 | 2,505.00 |
| 10 |  |
Ashtead Group Plc | -1.12% | -41.00 | 3,614.00 |
Tuesday newspaper round-up: Cash payments, supermarkets, Covid relief
More than a third of shoppers have been blocked from paying with cash since the start of the Covid crisis, prompting calls for urgent action to protect the millions who rely on the UK’s “critically endangered” cash network. The consumer group Which? said mixed messages about the safety of cash was partly to blame. The Bank of England has since clarified that “any risk from handling cash should be low”, especially when compared with touching shopping baskets, self-checkout screens or products in stores. – Guardian
Supermarkets face increased inspections from local councils to make sure they are Covid-19 secure amid a push from the government to clamp down further on coronavirus transmission. Local government officials have been asked by ministers to target the largest supermarkets for inspection to ensure companies are enforcing mask wearing, social distancing and limits on shopper numbers. – Guardian
Britain could be spared a massive tax raid if the economy bounces back strongly as vaccines are rolled out, a Treasury minister has said. Jesse Norman raised hopes that the country can get back on its feet without the burden of crippling extra levies to pay for an unprecedented peacetime borrowing spree which has funded the fight against Covid. If households and businesses burst out of lockdown and unleash pent-up demand, it could mean the biggest recession in 300 years gives way to a major boom – boosting tax revenues and slashing Government borrowing automatically. – Telegraph
The government is under mounting pressure from business leaders to provide more support to the economy before the budget in early March. The CBI has written to Rishi Sunak, the chancellor, calling for the furlough scheme, the business rates holiday and the deferral of VAT to be extended until at least the summer. Tony Danker, director-general of the lobby group, said that business resilience was at a “sobering new low” and added that staff morale had taken a hit from the latest lockdown restrictions. – The Times
Bosses of big businesses will be asked to commit personally to settling small suppliers’ bills in no more than 30 days as part of an overhaul of a government-backed scheme that promotes fair treatment of supply chains. About 3,000 signatories of the Prompt Payment Code will be told that they will need to pay 95 per cent of invoices from small companies within 30 days if they are to remain on the programme. – The Times
