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London open: Stocks gain as calm returns to markets
London stocks rose in early trade on Monday as a sense of calm returned to markets after last week’s turmoil.
At 0825 BST, the FTSE 100 was up 0.6% at 8,220.01.
Richard Hunter, head of markets at Interactive Investor, said: “Asian markets were broadly ahead overnight, although a public holiday in Japan lessened the amount of information available to investors. The yen extended its decline against the US dollar, which has been positive in the sense of stemming the tide of the unwinding of the carry trade which resulted in some violent swings last week, while also boosting the exporters to which Japan has a significant exposure.
“China will also face some investor tests this week, culminating in the release of retail sales and industrial production figures on Thursday, for which hopes are not high. The consensus is that the readings will reveal further weakness in a tepid economic recovery, which could well heighten calls once more for some significant stimulus from the authorities, which to date has been in short supply.
“The economic theme will also continue in the UK, with the release later in the week of both unemployment and inflation data. The recent rate cut from the Bank of England is not expected to be repeated this year, and the numbers will add some focus as to whether the reduction was appropriate at this point. The more recent market volatility has shaved some of the gains seen over recent weeks for the FTSE 250, although the index is still up by 5% so far this year.”
Investors were mulling comments from Catherine Mann, an external member of the Bank of England’s monetary policy committee. In an Economics Show podcast with the Financial Times, Mann said the UK should not be “seduced” into thinking the battle against inflation is over after a short-term drop in the headline measure targeted by the Bank.
Mann said she was still concerned about upside risks to inflation despite the main rate remaining at the bank’s 2% target in June.
Goods and services prices were set to rise again, Mann said, and wage pressures in the economy could take years to dissipate.
She told the FT that survey evidence suggested that companies were still expecting to make relatively big increases to both wages and prices, and “that says to me right now I’m looking at a problem for next year”.
In equity markets, BT Group surged after Bharti Global bought Altice UK’s 24.5% stake in the telecoms company.
“We welcome investors who recognise the long-term value of our business, and this scale of investment from Bharti Global is a great vote of confidence in the future of BT Group and our strategy,” BT boss Alison Kirkby said.
Elsewhere, Marshalls fell as it posted a 20% drop in first-half adjusted pre-tax profit amid weak end markets.
In broker note action, JD Sports was knocked lower by a downgrade to ‘sell’ at Deutsche Bank, but Diageo fizzed higher after an upgrade to ‘sector perform’ from ‘underperform’ at RBC Capital Markets
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Bt Group Plc | +6.28% | +8.20 | 138.70 |
| 2 |  |
Ocado Group Plc | +1.87% | +7.00 | 381.00 |
| 3 |  |
Centrica Plc | +1.66% | +2.05 | 125.30 |
| 4 |  |
Spirax Group Plc | +1.04% | +80.00 | 7,740.00 |
| 5 |  |
Standard Chartered Plc | +1.01% | +7.20 | 722.60 |
| 6 |  |
Anglo American Plc | +0.99% | +22.00 | 2,248.00 |
| 7 |  |
Bp Plc | +0.98% | +4.25 | 438.00 |
| 8 |  |
Marks And Spencer Group Plc | +0.97% | +3.10 | 321.90 |
| 9 |  |
Prudential Plc | +0.95% | +6.00 | 638.80 |
| 10 |  |
Antofagasta Plc | +0.95% | +17.50 | 1,864.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Segro Plc | -1.01% | -9.00 | 884.20 |
| 2 |  |
British Land Company Plc | -0.86% | -3.40 | 393.20 |
| 3 |  |
Rolls-royce Holdings Plc | -0.76% | -3.70 | 481.30 |
| 4 |  |
Land Securities Group Plc | -0.73% | -4.50 | 615.50 |
| 5 |  |
Crh Plc | -0.68% | -44.00 | 6,460.00 |
| 6 |  |
Pearson Plc | -0.67% | -7.00 | 1,035.00 |
| 7 |  |
Kingfisher Plc | -0.66% | -1.80 | 269.10 |
| 8 |  |
Smith & Nephew Plc | -0.64% | -7.50 | 1,158.50 |
| 9 |  |
Hikma Pharmaceuticals Plc | -0.49% | -10.00 | 2,028.00 |
| 10 |  |
Dcc Plc | -0.49% | -25.00 | 5,125.00 |
Monday newspaper round-up: Inflation, water compensation, FTSE 100 bosses pay
The Bank of England is poised for a setback in the battle against high inflation this week amid expectations for a first increase in the headline rate this year, highlighting the pressure from the cost of living crisis. In a week of key updates from the British economy, official figures on Wednesday are expected to show inflation returned above the Bank’s 2% target in July, driven in part by fast-rising prices for air fares, package holidays and hotels. – Guardian
Consumers in England and Wales will see the amount of compensation they receive for poor customer service from their water supplier at least double under new government measures to crack down on failing utilities companies. Setting out tough new rules to support households and businesses, the government said minimum compensation payments would be doubled for highly disruptive incidents, including when the water supply is interrupted, or when appointments with customers are missed. – Guardian
Ed Miliband has been urged to intervene in a row over a mini nuclear power plant in Cumbria, amid fears a government quango is hoarding land needed for the project. Moorside, located near Sellafield, is one of six sites currently being assessed by Great British Nuclear (GBN) as it aims to roll out a new generation of reactors. However, MPs and businesses have warned the energy secretary that the Nuclear Decommissioning Authority (NDA) is putting Moorside’s hopes of hosting the first small modular reactors (SMRs) in jeopardy. – Telegraph
More than 17,000 shops are at risk of closure over the next decade unless the Labour government overhauls the business rates regime, the boss of Sainsbury’s and the general secretary of the biggest retail union have warned. In an article for The Times, Simon Roberts, the chief executive of Sainsbury’s, and Paddy Lillis, the general secretary of the Union of Shop, Distributive and Allied Workers, say that tens of thousands of retail jobs could disappear because of a sharp rise in business rates bills. – The Times
The average pay for FTSE 100 bosses rose to a record of £4.2 million last year. According to an analysis of corporate pay deals by the High Pay Centre, Britain’s top bosses enjoyed an average bump from £4.1 million to £4.2 million in 2023, the highest on record. It makes a FTSE 100 chief executive’s earnings 120 times the wage of the average British worker. – The Times
