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London open: Stocks rise as pound slips; central bank updates in focus
London stocks rose in early trade on Monday, helped along by a weaker pound as investors looked ahead to a week of central bank updates.
At 0840 GMT, the FTSE 100 was up 0.6% to 7,435.43, while the pound was down 0.2% versus the dollar at 1.3369 and 0.4% weaker against the euro at 1.1339.
Spreadex analyst Connor Campbell said: “This week’s economic calendar is a veritable Christmas feast, with updates from the Federal Reserve, Bank of England and ECB; the ominous trio of UK inflation, wage growth and retails sales; and the latest US CPI reading. Sadly none of that arrives today, with Monday the chilly calm before a snowstorm of data.
“Thanks to Monday’s meagre offerings, it seems the pound has been forced to mull over last week’s ‘Brexit breakthrough’, with the weekend’s papers full of potential issues. These include reports that a number of non-EU countries have voiced displeasure at the thought of the UK getting a special deal, and a potential disagreement between Ireland and David Davis after the latter claimed last Friday’s agreement was a ‘statement of intent’ rather than something more concrete.”
In corporate news, Babcock was on the front foot after it said the adoption of new accounting rule IFRS 15 would not require a change in contract revenue or profit recognition.
BAE Systems rallied as it announced a £5bn contract to supply Typhoon aircraft to the Qatari air force.
Thread maker Coats rose after saying it has bought US specialist yarn manufacturer Patrick Yarn Mill for $21m with a further $4m on the table subject to performance targets.
Investec advanced as it reassured investors that it has “immaterial exposure” to embattled Steinhoff International, the South African retail giant that caused alarm for its lenders after its shares fell 80% last week.
Convatec was the standout gainer after an upgrade to ‘overweight’ by Morgan Stanley, while Inmarsat was hit by a downgrade to ‘neutral’ at Goldman Sachs.
Whitbread was in the red after chief executive Alison Brittain told The Times that Costa and Premier Inn are not yet ready to stand alone, knocking the froth off recent excitement about a new activist investor.
