Hot Features
Premium
Register for streaming realtime charts, analysis tools, and prices.
London open: FTSE rises with Burberry and Barratt to the fore
London stocks gained ground on Wednesday morning after two days of losses, as the pound fell.
Just after 0900 BST the FTSE 100 was up 0.8% to 7,386.58, after sterling pushed to new eight-month lows against the euro and dropped to 1.2813 against the dollar, its lowest so far in July.
US political intrigue ahead of Janet Yellen’s testimony to Congresssaw US stock markets closed flat after a strong rebound and there was a mixed session in Asia overnight.
“Speculation has continued to grow as to the timing of when the Federal Reserve could start to pare down its balance sheet and whether this process would happen alongside the prospect of further rate rises,” said Michael Hewson at CMC Markets.
“Such a move would in all probability be a little on the risky side, tightening policy from two different directions, and will be a process the Fed will need to be able to communicate effectively in the coming months. Judging from Fed Fund futures pricing, markets already appear to be pricing the prospect that further additional rate rises are likely to be the least preferred option, and that the main focus is likely to be on looking at preparing the ground for reducing the size of the balance sheet gradually,” he said.
In London, the weaker pound and higher prices for commodities like oil and copper were major boosts for the FSTE 100, with Shell and BP among the top risers.
Burberry was top of the leaderboard however after releasing an encouraging first quarter update, with new chief executive Marco Gobbetti promising to create “new energy to drive growth”. Retail was up 13% compared to the same period last year or up 3% on an underlying basis if currencies rates are ignored. Like-for-like retail sales rose 4%, accelerating from 1% in the last full year.
Barratt Developments was also on the up, continuing the recent run of strong updates from housebuilders with full year profits ahead of expectations.
Micro Focus shares were down as management said they remained keen to continue to do more deals as the software group confirmed full year adjusted numbers which had been flagged earlier. The HPE Software reverse takeover is on track to complete on 1 September, while management see long term shareholder returns of 15-20%.
Discount retailer B&M was leading the mid-caps as it began its new financial year at an impressive pace, buoyed by strong sales of garden furniture in the recent hot spell. Total sales rose 18.3% to £656.3m in the three months to 30 June.
London-based property business Daejan’s preliminary results said its investment property figure had risen to £2.26bn from £2.01bn at the same time last year, as profit before tax rose to £198.4m from £173.2m despite income falling to £64.8m from £68.2m.
