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London open: Stocks in the black as investors digest earnings; Direct Line rallies
London stocks rose in early trade as investors chewed over more earnings reports and looked ahead to the latest survey on the UK manufacturing sector.
At 0830 BST, the FTSE 100 was up 0.5% to 7,404.91, while the pound was flat against the dollar at 1.3212 and up 0.2% versus the euro at 1.1179.
Markit’s manufacturing purchasing managers’ index is due at 0930 BST.
Spreadex analyst Connor Campbell said: “Analysts are expecting a very slight improvement, from 54.3 to 54.4 month-on-month. That kind of minor increase may not make too much different to the FTSE or pound; anything higher or lower, meanwhile, could cause a shift in trading.”
Investors were also mulling over the latest survey from mortgage lender Nationwide, which showed house prices rose for the second month in a row in July after a drop between March and May.
House prices were up 0.3% from July, compared to a 1.1% increase in June and versus expectations for a 0.1% slip.
Compared with July 2016, prices were up 2.9%, down from a 3.1% increase the month before.
In corporate news, insurer Direct Line was the standout gainer as it posted a 9.5% jump in first-half operating profit as gross written premiums rose 5% and it bumped its dividend up by 39%.
Testing services company Intertek racked up healthy gains after reporting a rise in first-half profit thanks to a strong performance from its non-oil related operations.
Rolls-Royce gained ground as it said first-half underlying profit rose nearly 150% as revenue edged up and the aerospace and defence giant reiterated its outlook for the full year.
Centrica was sent higher as it announced that British Gas will hike its electricity prices for households by 12.5% from mid-September after adjusted earnings fell 11% in the first half.
Housebuilder Taylor Wimpey built solid gains after reporting 24% drop in first-half pre-tax profit as it put aside £130m for homebuyers that were affected by a leasehold scandal, as the numbers were better than expected.
Oil giant BP gushed higher as its second-quarter net income beat analysts’ expectations, while Morrisons advanced after announcing a new supply deal with McColl’s.
Shares in Greggs were looking tasty after it reported a jump in sales and profits for the first half.
On the downside, British American Tobacco was in the red after the Serious Fraud Office opened a formal investigation into possible historic misconduct by the company in Africa, while Carillion took a hit as Investec resumed coverage of the stock at ‘sell’.
