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London open: Stocks rally on China optimism; Bunzl boosts guidance
London stocks shot higher in early trade on Tuesday following a positive Asian session, as traders returned to their desks after the long weekend.
At 0915 BST, the FTSE 100 was up 1.2% at 7,424.44.
Asian markets rallied for a second day in a row, after China unveiled strategic measures to boost its stock markets, such as a cut in stamp duty and the loosening of margin loan rules.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Fresh evidence that inflation is going in the right direction and fresh stimulus for industries in China have given the FTSE 100 a big spring in its step in early trade.
“Commodity giants have jumped higher as metals prices have risen after Beijing introduced support for transport, property and infrastructure projects. For now this extra help has boosted sentiment but underlying questions still remain over the fragility of China’s economy.”
On home shores, investors were digesting the latest data from the British Retail Consortium/NielsenIQ, which showed that annual shop price inflation eased to 6.9% in August from 7.6% in July. Meanwhile, food inflation fell to 11.5% from 13.4%.
BRC chief executive Helen Dickinson said: “Better news for consumers as shop price inflation in August eased to its lowest level since October 2022. This was driven by falling food inflation, particularly for products such as meat, potatoes and some cooking oils. These figures would have been lower still had the Government not increased alcohol duties earlier this month.”
In equity markets, distribution specialist Bunzl rose sharply after it upgraded guidance for annual adjusted operating profits as it reported a rise in half-year earnings.
“We now expect adjusted operating profit to be moderately higher than in 2022 at constant exchange rates, with operating margin remaining strong and moderately higher than that achieved in the prior year,” it said.
Drinks company Britvic was boosted by an upgrade to ‘overweight’ at Barclays.
The bank said: “In the wake of Covid and inflation disruption to the implementation of Britvic’s new growth strategy, we now see headwinds clearing and identify multiple top-line and margin drivers that can deliver accelerated growth.”
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Ocado Group Plc | +3.75% | +27.80 | 769.60 |
| 2 |  |
Smith (ds) Plc | +3.48% | +10.20 | 303.40 |
| 3 |  |
Bunzl Plc | +3.45% | +94.00 | 2,818.00 |
| 4 |  |
Persimmon Plc | +3.39% | +33.50 | 1,020.50 |
| 5 |  |
Smurfit Kappa Group Plc | +3.24% | +102.00 | 3,250.00 |
| 6 |  |
Prudential Plc | +3.21% | +30.40 | 977.20 |
| 7 |  |
Barratt Developments Plc | +2.71% | +11.70 | 443.00 |
| 8 |  |
Johnson Matthey Plc | +2.62% | +40.50 | 1,583.50 |
| 9 |  |
Taylor Wimpey Plc | +2.52% | +2.75 | 112.05 |
| 10 |  |
Fresnillo Plc | +2.51% | +13.80 | 563.20 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Carnival Plc | -0.85% | -9.50 | 1,112.50 |
| 2 |  |
Shell Plc | -0.00% | -0.00 | 1,894.60 |
| 3 |  |
Nmc Health Plc | -0.00% | -0.00 | 938.40 |
| 4 |  |
Just Eat Plc | -0.00% | -0.00 | 861.00 |
| 5 |  |
Micro Focus International Plc | +0.00% | +0.00 | 532.00 |
| 6 |  |
Rsa Insurance Group Ld | +0.00% | +0.00 | 684.20 |
| 7 |  |
Royal Bank Of Scotland Group Plc | +0.00% | +0.00 | 120.90 |
| 8 |  |
Standard Life Aberdeen Plc | +0.00% | +0.00 | 274.10 |
| 9 |  |
Reckitt Benckiser Group Plc | +0.00% | +0.00 | 6,498.00 |
| 10 |  |
London Stock Exchange Group Plc | +0.00% | +0.00 | 8,620.00 |
Monday newspaper round-up: Wilko, London house prices, supermarkets
A union representing thousands of workers at Wilko is seeking an urgent meeting with the business secretary after being told by potential rescuers of “difficulties” in engaging with the administrators who will decide upon the stricken retail chain’s future. On Monday, the GMB national secretary, Andy Prendergast, wrote to Kemi Badenoch asking her to ensure that PricewaterhouseCoopers considered all bids for the budget retailer where 12,500 jobs were hanging in the balance. – Guardian
Homeowners in London have knocked £23,500 off property asking prices as soaring interest rates hit the capital harder than anywhere else in the country. Since asking prices in London peaked in May, sellers have reduced their advertised prices by 3.4pc, the largest drop of any region, according to data from Rightmove. – Guardian
Michael Gove’s “London-centric” building policies are anti-driver and will fail to deliver the homes the country needs, the boss of a top British developer has claimed. Matthew Pratt, chief executive of FTSE 250 house builder Redrow, criticised the Levelling Up Secretary’s proposed rules for “beautiful” designs as single-minded and impractical, arguing that restrictions on off-street parking will end up backfiring. – Telegraph
Trust in British supermarkets has fallen to the lowest level for a decade as households grapple with high prices, despite the rate of food prices inflation easing this month. The latest monthly consumer insight tracker from Which?, the consumer group, found that confidence in the grocery industry had dropped in August to the lowest level since February 2013, a time when horse DNA had been discovered in frozen beef burgers and lasagne sold in some Irish and British supermarkets. – The Times
One of Britain’s leading life sciences companies is to be taken over by an American group in a $5.7 billion deal after its founder called for a change in strategy. Cambridge-based Abcam is a global supplier to the pharmaceuticals research industry. Quoted on Nasdaq, the technology-heavy New York stock exchange, it has agreed to a $24-per-share offer from Danaher under which it would continue as a standalone entity within the parent group. – The Times
