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London open: Iron supplements move towards two-month high
Stocks crawled drowsily towards a two month high at the start of what is expected to be a quieter week, helped by a dose of stronger metals prices.
The FTSE 100 was up 19 points or 0.25% to 7,530.85 after half an hour of trading on Monday, with the pound flat on the dollar at 1.3041 and down 0.1% against the euro at 1.1061.
Helping sentiment overnight was another Monday morning rally for iron ore prices, noted Mike van Dulken at Accendo Markets, this time on fears of winter supply issues.
This saw BHP Billiton, Anglo American, Glencore and Rio Tinto among the top risers in early trading.
Gold miners Randgold and Fresnillo were up even though the yellow metal’s prices were back below $1,260 after Friday’s jobs report led to big gains for the dollar and increased the relative cost of owning the zero-yielding metal.
“In theory we should now be at the start of the real summer lull that will likely last until the Jackson Hole build-up,” said Jim Reid at Deutsche Bank, pointing out that the week after the US non-farm payrolls is normally quiet anyway but this week could be extra so.
“There’s only really one obvious observable candidate to create a little noise this week and that’s the US CPI numbers on Friday. Friday’s slightly stronger than expected payroll number and hint of stronger wages did have an impact on markets as we’ll see below. Inflation data is probably where the market is most sensitive to a surprise at the moment.”
The macroeconomic data is indeed thin on the ground on Monday, with the Halifax house price index showing a 0.4% monthly increase, which partially offset declines recorded between May and June but still products a quarterly fall of 0.2%.
This was the fourth successive quarterly decrease in house prices, which has not happened since November 2012.
Later in the morning Eurozone Sentix investor sentiment data is out at 9.30 BST and in the afternoon US labour market conditions at 1500 BST, which dropped sharply in June to a six-month low, plus some Fedspeak from James Bullard and Neel Kashkari.
In company news, bookmaker Paddy Power Betfair was lower after confirming that chief executive Breon Corcoran will be stepping down after 16 years in the job. The recently merged group said interim revenue growth would be up 9% and underlying EBITDA up 21% when it reports on Tuesday.
Ultra Electronics‘ was lower as it announced top and bottom lines that were little changed at the half-year stage, though the company sounded a confident note on the full-year outlook, pointing to a “strong” order intake during the final part of the reporting period.
UBM was down after announcing the death of chair Dame Helen Alexander over the weekend.
NewRiver REIT announced that chief executive David Lockhart was shortly undergoing an medical procedure that will require him taking a leave of absence. The FTSE 250 firm’s board said that during that time, the day-to-day executive responsibilities of the company would be shared between the company’s property director Allan Lockhart and its chief financial officer Mark Davies.
Health and safety group Halma was moderately higher after completing two overseas acquisitions in its medical business for the equivalent of £12.1m and £3.4m, which are expected to both boost earnings. The larger is Cardios, a Brazilian specialist in ambulatory blood pressure monitoring, while the other purchase was of a range of non-invasive blood pressure devices.
