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London open: Stocks push higher amid Monte dei Paschi rescue hopes
Stocks in London rose in early trade as reports of a possible rescue package for Italian lender Monte dei Paschi helped to underpin sentiment.
At 0830 GMT, the FTSE 100 was up 0.9% to 6,839.94. Meanwhile, oil prices retreated, with West Texas Intermediate down 0.8% to $50.55 and Brent crude down 0.7% at $53.57.
Spreadex‘s Connor Campbell said: “The potential for a Monte dei Paschi package from the Italian government is lifting the European markets this Wednesday.
“There have been multiple different reports about what could happen. Last night Reuters claimed that the government could take another €2bn stake in Italy’s oldest bank, while this morning La Stampa stated that the country could ask for a €15bn European Stability Mechanism loan, which would be used to aid not only Monte dei Paschi but a few of Italy’s other ailing banks.
“Of course nothing has been confirmed, and the precarious political situation in Italy is going to make doing anything a lot more difficult.”
In corporate news, train and bus operator Stagecoach was in the black after it hiked its interim dividend to show its confidence in the future and keep investors chipper as profits and earnings fell in the face of what it said was a continuing “challenging and uncertain” political and economic environment.
Accounting software company Sage gained as it confirmed that it is “evaluating potential strategic options” for the payments business in North America, including a sale, but stressed that there could be “no certainty” that the evaluation would lead to any action.
FTSE 250 provider of global mobile satellite communications Inmarsat advanced after signing a contract with Air New Zealand to provide Global Xpress connectivity across the airline’s long-haul and short-haul fleets.
Miner Rio Tinto was a high riser as Credit Suisse upgraded the stock to ‘outperform’ from ‘neutral’.
Support services and construction group Carillion was on the back foot as it said it is trading in line with expectations but that the pace of new order intake has dropped in the second half.
Business intelligence group Informa was weaker after it announced the issue of $500m of new US private placement notes which will be used to pay down the majority of the $675m previously arranged and drawn down acquisition facility.
On the data front, UK manufacturing production and industrial production are at 0930 GMT. In addition, MPs will be voting on the government’s plan to trigger Article 50 by the end of March next year.
