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London open: Stocks gain as investors eye US inflation, central bank meetings
London stocks rose in early trade on Monday following losses at the end of last week, as investors braced for a week of key rate announcements and the latest US inflation reading.
At 0820 BST, the FTSE 100 was up 0.4% at 7,595.63.
The Federal Reserve, European Central Bank and Bank of Japan are all due to make rate announcements this week.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “To pause or not to pause – is the big question investors are mulling about the intentions of Fed policymakers ahead of the crunch meeting this week.
“The Federal Open Markets Committee will make their interest rate decision known on Wednesday. They’ve taken up arms against a rising sea of inflation by hiking rates at the fastest pace in 40 years, but with signs that the economy is shuffling off into a potential recession, the expectation is that they are likely to keep rates on hold.
“The latest inflation data out on Tuesday could sling another arrow of uncertainty into investors’ minds if headline inflation doesn’t head down quite as fast as expected, and core inflation, stripping out energy and food prices stays elevated.
“But with signs the mighty services industry is slowing, with the ISM Services PMI index showing growth tailing off, it has added to expectations that the Fed will take a pause this week and assess the economic currents. Any deviation from the forecast path is likely to cause a jolt of volatility on markets, after the risk-on appetite has grown markedly.”
In equity markets, online supermarket Ocado surged to the top of the FTSE 100 after an upgrade to ‘neutral’ at BNP Paribas Exane.
Online electric retailer AO World rallied after Mike Ashley’s Frasers Group took a 18.9% stake in the company. The owner of Sports Direct, House of Fraser and other retail clothing chains said it bought 109.4m shares at 68p each.
“The investment is the culmination of productive talks over the last two years about establishing a strategic partnership,” AO World said in a statement.
Frasers shares also gained.
Elsewhere, Glencore was in focus after it made an offer to buy Teck Resources‘ steelmaking coal business as a standalone unit. The Swiss mining and trading giant said it had made the alternative proposal “as it is expected to allow for a value accretive demerger of the combined coal and carbon steel materials business”.
“We also note continued strong support from shareholders for a transaction between Glencore and Teck,” it added.
Miners fell in tandem with copper prices, with Anglo American, Antofagasta and Rio all down.
Great Portland Estates was knocked lower by a downgrade to ‘sell’ at Goldman Sachs, while Segro lost ground after a downgrade to ‘neutral’ by the same outfit.
Dr Martens was in the red after RBC Capital Markets slashed its price target on the shares to 150p from 180p.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Ocado Group Plc | +6.36% | +24.60 | 411.20 |
| 2 |  |
Carnival Plc | +3.32% | +30.20 | 939.60 |
| 3 |  |
Tui Ag | +2.81% | +15.50 | 567.00 |
| 4 |  |
Experian Plc | +2.20% | +63.00 | 2,931.00 |
| 5 |  |
Direct Line Insurance Group Plc | +2.10% | +3.45 | 168.05 |
| 6 |  |
Admiral Group Plc | +2.05% | +47.00 | 2,341.00 |
| 7 |  |
Croda International Plc | +2.05% | +108.00 | 5,382.00 |
| 8 |  |
Flutter Entertainment Plc | +1.90% | +290.00 | 15,530.00 |
| 9 |  |
Burberry Group Plc | +1.66% | +37.00 | 2,262.00 |
| 10 |  |
Rentokil Initial Plc | +1.49% | +9.60 | 653.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Segro Plc | -2.02% | -16.20 | 784.40 |
| 2 |  |
Fresnillo Plc | -1.62% | -11.00 | 666.20 |
| 3 |  |
Anglo American Plc | -1.53% | -37.50 | 2,419.50 |
| 4 |  |
Vodafone Group Plc | -1.51% | -1.13 | 73.75 |
| 5 |  |
Rio Tinto Plc | -1.33% | -68.00 | 5,057.00 |
| 6 |  |
Bp Plc | -0.99% | -4.65 | 464.25 |
| 7 |  |
Bhp Group Limited | -0.95% | -22.50 | 2,357.50 |
| 8 |  |
Shell Plc | -0.85% | -19.50 | 2,275.00 |
| 9 |  |
Antofagasta Plc | -0.82% | -12.00 | 1,455.50 |
| 10 |  |
Bt Group Plc | -0.68% | -1.00 | 146.00 |
Monday newspaper round-up: UK growth, Waitrose, HMRC, Crispin Odey
Britain will be left with deep scars from the pandemic despite narrowly escaping a second recession within three years and growing signs of an economic pick up, according to new forecasts. A new report by the accountancy firm KPMG has found that the economy has enjoyed a better start to the year than it had thought, and is now expected to grow by 0.3% this year, compared with its previous prediction of an uplift of just 0.1%. – Guardian
Waitrose has cut the price of bread, beef mince, chicken and other kitchen staples as the supermarket battles to recover from an IT meltdown that caused widespread empty shelves. The grocer is slashing the cost of hundreds of items for the second time this year, after pledging to spend £100m on making its prices more affordable. – Telegraph
London homeowners will see their annual bill jump by up to £7,300 when they remortgage this year as 3.5 million borrowers face a rate shock. Nationally, homeowners will have to spend nearly an extra £9bn in interest over 2023 and 2024 as they are forced to refinance at rates that are double what they are used to, according to the Centre for Economics and Business Research. – Telegraph
HMRC’s delayed programme to digitise the tax system is expected to cost five times its estimate in real terms, according to the spending watchdog. The National Audit Office (NAO) warned that “significant delivery risks” continued to loom over the “making tax digital” scheme, which was announced eight years ago. It has been delayed four times. – The Times
Just days after fresh allegations surfaced of sexual misconduct by Crispin Odey, one of Britain’s most high-profile financiers, partners at the firm he founded moved quickly to oust him. Peter Martin, the chief executive of Odey Asset Management, and Michael Ede, chief financial and operating officer, signed a statement on Saturday from its executive committee announcing that Odey, 64, was leaving the firm that he founded 32 years ago. – The Times
