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London stocks rose in early trade on Monday, taking their cue from a positive close on Wall Street at the end of last week and thanks to a flurry of well-received corporate releases to warm investors’ cockles amid the falling snow.
At 0830 GMT, the FTSE 100 was up 0.5% to 7,282.16, while the pound was up 0.3% against the euro at 1.1391 and 0.5% firmer versus the dollar at 1.4040.
Rebecca O’Keeffe, head of investment at Interactive Investor, said: “Equity markets in the UK and Europe are off to a good start, following on from a late surge in the US on Friday and a positive start to the week in Asia. Inflation and US monetary policy has been the catalyst for recent volatility and remains the centre of attention, with all eyes on Jerome Powell’s economic testimony this week and the Federal Reserve’s preferred inflation measure, the core personal consumption expenditures price index, due out on Thursday.
“This week gives investors the first major opportunity to establish what new Federal Reserve chair Jerome Powell thinks about the US economy, as he appears before congress on Tuesday and Thursday. Mr Powell has had a baptism of fire in the three weeks since he took on his new role, with markets experiencing huge volatility on fears that inflation will see the Fed raise rates more aggressively than anticipated. The opportunity to establish what Mr Powell thinks about the US economy, inflation, interest rates and asset values is therefore highly important for markets.”
On the data front, BBA mortgage approvals are due at 0930 GMT. Investors will also eye a speech by Labour leader Jeremy Corbyn, in which he’s expected to announce a commitment to a non-tariff agreement that would see the UK remain in the EU customs union and avoid a ‘hard’ Brexit.
In corporate news, British Airways and Iberia parent International Consolidated Airlines Group was the standout gainer, recovering from losses at the end of last week when investors were left disappointed by its full-year results.
Associated British Foods rose despite reporting a rare decline in like-for-like sales at its Primark retail arm in the first half of the year, as it said its full-year outlook was unaltered.
Vodafone advanced after saying it will become Samsung’s exclusive strategic telecoms partner in selected European markets, to develop and launch a range of consumer ‘internet of things’ (IoT) smart home product and services.
Distribution and outsourcing group Bunzl was in the black as it posted a 13% jump in full-year pre-tax profit thanks to recent acquisitions and a weaker pound.
FTSE 100 property development and investment companyHammerson – which announced a £3.4bn takeover of Intu Properties in December – edged higher after it reported a rise in full-year pre-tax profit as net rental income jumped 7%.
Dechra Pharmaceuticals rallied as the veterinary products manufacturer’s first-half revenues came in ahead of expectations, while Senior was on the front foot even as it posted a drop in full-year profit, as sales exceeded £1bn for the first time.
Events organiser Ascential gained after well-received full-year numbers and turnaround specialist Melrose Industriesadvanced after saying that its hostile £7.4bn for GKN has received clearance from US and Candian authorities.
Hiscox tumbled after it posted a drop of more than 90% in full-year pre-tax profit as it took a hit from natural catastrophes.
Sub-prime lender Provident Financial was also under the cosh ahead of its preliminary full-year results on Tuesday and after reports in the Sunday newspapers that it has been sounding out investors about a “bumper cash call”.
In broker note action, BP and Centrica were lifted to ‘outperform’ from ‘sector perform’ by RBC Capital Markets, while Jupiter Fund Management was downgraded to ‘sell’ at UBS.
