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London open: Stocks gain as investors eye CPI, BoE decision
London stocks rose in early trade on Monday as investors eyed a key UK inflation reading and the latest policy announcement from the Bank of England later in the week.
At 0850 BST, the FTSE 100 was up 0.4% at 8,179.33.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “The FTSE 100 has edged into positive territory at the start of a week which will be dominated by speculation over interest rates and the policies touted on the UK General Election campaign.
“Investors are largely shrugging off data from China showing ongoing struggles for the economy. Some of the risk-off sentiment which spread sparked by worries about the far-right gaining legislative power in France has eased off.
“Although the European Central Bank does not look like it’ll be easily propelled into buying French government debt, hopes have risen slightly that spending pledged by the National Rally party would in practice be curtailed in a hung parliament scenario. 10-year French government bond yields edged up slightly to 3.15% but are significantly down on the level they shot up to a week ago of 3.24%.”
Looking ahead to the rest of the week, all eyes will be on the latest UK consumer price inflation data due on Wednesday and a policy decision from the Bank of England on Thursday.
Streeter said “there are high hopes are high hopes that inflation’s recent rollercoaster ride may have finally come to a halt back at target”.
“After a disappointing reading in April, which saw the CPI index frustratingly hover elusively above 2%, disinflationary pressures are expected to have helped push prices down further. The effect of unemployment ticking up to 4.4% in April may have made some workers more cautious in their spending patterns.
“That certainly showed up in the latest economic growth figures, which showed activity in the retail sectors slowing sharply. May was warm but wet, which may have continued to affect demand. But it doesn’t look like the Bank of England will join the celebratory party immediately and cut interest rates.”
Investors were mulling the latest data from China’s National Bureau of Statistics, which showed that retail sales in China smashed forecasts in May, though industrial production growth slowed much more than expected.
On home shores, meanwhile, figures from Nationwide showed house prices were largely unchanged in June following a bumper performance in May.
According to Nationwide’s house price index, house prices were flat in June, dipping just £21 from May’s high to £375,110. Prices sparked 0.8% in May.
Year-on-year, prices rose 0.6% in June, unchanged on May’s 0.6% annual increase.
The number of sales agreed was 6% higher year-on-year, while demand remained stable, up 5%.
May is traditionally a strong period for housing prices, with June weaker in comparison.
In a recent Rightmove poll of 14,000 people, a comfortable majority said the general election on 4 July would not affect plans to move house.
But in the two weeks since Rishi Sunak’s surprise announcement, the number of top-end sellers coming to market was 3% lower than a year ago, Rightmove noted, versus being up 11% in the previous fortnight.
Tim Bannister, director of property science at Rightmove, said: “It’s always difficult to predict how home-movers will react to sudden uncertainty, but…[in] previously election campaigns, market activity has remained largely steady.
“This election has followed a similar pattern so far.
“However, some potential sellers appear to be watching and waiting rather than taking action, evidence by the dip in the number of new sellers coming to market, particularly at the top end.”
In corporate news, publishing, events and B2B consultancy group Ascential gained as it said trading was in line with expectations for the full year, helped by strong growth in marketing and fintech operations.
B&Q owner Kingfisher ticked up after saying said it had appointed British Land chief financial officer Bhavesh Mistry to the same role at the home improvement company.
Hikma Pharmaceuticals nudged higher after it agreed to buy parts of Xellia Pharmaceuticals, a Copenhagen-based specialty company focusing on providing anti-infective treatments and other critical care therapies, for up to $185m.
Hikma will buy parts of Xellia’s US finished dosage form (FDF) business and assets, including a commercial portfolio and pipeline of differentiated products, a manufacturing facility in Cleveland, Ohio, sales and marketing capabilities, and an R&D centre in Zagreb, Croatia.
SSP was under the cosh after a downgrade to ‘sell’ at Goldman Sachs.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Hargreaves Lansdown Plc | +2.33% | +24.50 | 1,075.50 |
| 2 |  |
Flutter Entertainment Plc | +2.20% | +305.00 | 14,140.00 |
| 3 |  |
Tui Ag | +2.18% | +12.50 | 586.00 |
| 4 |  |
St. James’s Place Plc | +2.02% | +10.50 | 530.50 |
| 5 |  |
Legal & General Group Plc | +1.47% | +3.30 | 228.00 |
| 6 |  |
Carnival Plc | +1.30% | +14.00 | 1,091.00 |
| 7 |  |
Vodafone Group Plc | +1.22% | +0.84 | 69.80 |
| 8 |  |
Admiral Group Plc | +1.10% | +28.00 | 2,579.00 |
| 9 |  |
Crh Plc | +1.06% | +64.00 | 6,094.00 |
| 10 |  |
Rolls-royce Holdings Plc | +1.05% | +4.80 | 462.60 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Ocado Group Plc | -1.57% | -5.60 | 351.70 |
| 2 |  |
Rio Tinto Plc | -1.51% | -79.00 | 5,140.00 |
| 3 |  |
Bhp Group Limited | -1.39% | -31.00 | 2,204.00 |
| 4 |  |
Severn Trent Plc | -1.37% | -34.00 | 2,440.00 |
| 5 |  |
United Utilities Group Plc | -1.01% | -10.50 | 1,026.00 |
| 6 |  |
Melrose Industries Plc | -0.93% | -5.60 | 595.00 |
| 7 |  |
Glencore Plc | -0.86% | -3.90 | 450.65 |
| 8 |  |
Gsk Plc | -0.78% | -12.50 | 1,592.00 |
| 9 |  |
Johnson Matthey Plc | -0.77% | -12.00 | 1,539.00 |
| 10 |  |
Compass Group Plc | -0.77% | -17.00 | 2,200.00 |
Monday newspaper round-up: Manufacturers, landlords, Blackstone
The UK’s tax authority has not fined a single “enabler” of offshore tax evasion or noncompliance in five years, despite landmark powers to impose huge fines. Tory ministers claimed new laws introduced in 2017 allowed HM Revenue and Customs (HMRC) to pursue accountants, lawyers and bankers who facilitate offshore tax evasion would “create a level playing field”, with potential fines of several millions of pounds. – Guardian
Britain’s largest manufacturers are expecting orders and output to increase dramatically in the second half of the year, even as a chronic shortage of skilled workers is threatening the ability of some companies to do business. Manufacturing is returning to normal business conditions after wild swings in demand during the pandemic, disruptions in prices after the Russian invasion of Ukraine, and the effect on supply chains of blockages and conflict around the Suez canal, according to a survey of 320 companies by the trade body Make UK. – Guardian
Labour’s plan to strike a security pact with the European Union will threaten British sovereignty, Grant Shapps has warned. The Defence Secretary claimed the proposal would hand control over key defence decisions to Brussels and sow division within Nato, at a time when the EU is seeking to set up separate military structures to the transatlantic alliance. – Telegraph
Landlords will be hoping for a welcome boost from the Euros and Olympics this summer, but for many pubs it will come too late. Pubs are disappearing at a rate of 80 a month across England and Wales so far this year, according to analysis of official figures by property consultancy Altus Group. The monthly rate of “vanishing” pubs has jumped by 56pc compared to last year. The analysis measures the number of premises that have been either demolished or repurposed and includes some that were sitting vacant or up for let before disappearing. – Telegraph
Blackstone has taken the unusual step of paying directors at Hipgnosis Songs Fund an extra £250,000 in fees for the “increased workload” associated with getting the £1.2 billion sale of the music rights specialist over the line. The private equity firm improved its offer for the music rights owner to $1.6 billion this month and restructured the deal to make it easier to complete, ending a long-running takeover saga. – The Times
The rise in the minimum wage is piling pressure on employers, who are cutting back on hiring this summer amid broader fears of labour shortages in key sectors of the economy, according to new figures. Data from the Recruitment and Employment Confederation, an industry body, shows job postings for temporary summer jobs have fallen sharply in the hotel, restaurant, tourism and construction sectors in April and May, compared with the same months last year after a climb in the minimum wage. – The Times
