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London open: Stocks rise as miners, HSBC lend a hand
London stocks rose in early trade on Monday, helped along by a weaker pound and some well-received earnings from HSBC.
At 0830 BST, the FTSE 100 was up 0.6% to 7,415.02, while the pound was down 0.2% against the dollar at 1.3110 and 0.1% weaker versus the euro at 1.1174.
The gains in equity markets came despite missile launches from North Korea and growing tensions between the US and Russia.
Russian President Vladimir Putin announced earlier that 755 staff must leave US diplomatic missions in retaliation for new US sanctions against Moscow.
Meanwhile, on Friday, North Korea tested a second intercontinental ballistic missile, claiming it proved that the whole of the US was within striking range. This came three weeks after the first ICBM test.
Heavily-weighted mining stocks put in a solid performance despite a slightly disappointing manufacturing PMI from China overnight. The official PMI for July fell to 51.4 from June’s 51.7, just shy of expectations of 51.6.
In corporate news, HSBC rallied as it unveiled a share buyback of up to $2bn this year alongside a better-than-expected 5% rise to $10.2bn in first-half profits.
AstraZeneca gained ground as the US Food and Drug administration agreed to speed up the process required for the development and regulatory review of its new cancer drug Imfinzi, while Indivior advanced as its new drug application for a treatment for opioid use disorder was accepted by the US FDA for priority review.
Building materials group CRH edged up after saying it has established a euro commercial paper programme, under which its wholly-owned finance subsidiaries CRH Finance DAC and CRH Finance UK could issue, from time to time, unsecured short-term euro commercial paper notes through appointed dealers.
Senior rose despite posting a drop in pre-tax profit, as its first-half revenues and operating profit came in ahead of expectations, while Fidessa was on the front foot after reporting a 14% jump in first-half pre-tax profit.
IT-focused professional services company FDM Group surged after saying it experienced “strong” trading in the first half, with revenue up 35.4% to £117.1m.
Severn Trent and United Utilities were boosted by an upgrade to ‘outperform’ at RBC Capital Markets, while Royal Mail edged higher on the back of an HSBC upgrade to ‘buy’.
On the downside, insurer Hiscox was on the back foot after it reported a 12.5% jump in first-half pre-tax profit thanks to a solid performance in its retail business, but a drop including the impact of foreign exchange.
Tobacco stocks were under the cosh again after suffering heavy falls on Friday as US regulators said they planned to lower nicotine levels to non-addictive levels in an effort to reduce the number of tobacco-related deaths, with Imperial Brands and British American Tobacco both lower.
Coats Group was in the red despite reporting a solid first set of results since weaving its way back the FTSE 350. The industrial threads and yarns maker reported 38% growth in earnings and hiked its dividend 7%.
On the data front, UK net lending to individuals, consumer credit, mortgage approvals and money supply figures are all due at 0930 BST
Accendo Markets analyst Henry Croft said: “UK mortgage approvals and consumer credit will offer the latest insight into the state of lending to house buyers. With inflation weakening in June, the low interest rate environment looks set to continue. But will this have filtered through to consumers? Watch housebuilders.”
