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London stocks rose in early trade, boosted by deal news and well-received earnings from the likes of Standard Charteredand Persimmon, as traders eye the first congressional testimony from new Federal Reserve Chair Jerome Powell.
At 0835 GMT, the FTSE 100 was 0.4% higher at 7,318.27, while the pound was up 0.1% against the dollar to 1.3986 and flat versus the euro at 1.1338.
With the market’s views on the path for US interest rate hikes a key focus in recent weeks, James Hughes, chief market analyst at AxiTrader, said Powell’s semi-annual Congress testimony would be closely watched. “Does he remain pragmatic and toe the party line when it comes to policy, the balance sheet and the inflation outlook? Or, just maybe does he set to build his reputation and go in all guns blazing. There are arguments for both approaches but the safe money is on the former.
“So what will Jerome Powell say? For me he will take the last FOMC meeting minutes and almost repeat it word for word, with the expectation of inflation hitting 2% but not overshooting, and say that gradual rate hikes are still necessary, stopping short of hinting that we may well see more than three hikes in 2018.”
In corporate news, Sky rocketed as US cable TV company Comcast made a £22.1bn takeover bid for the broadcaster, outbidding 21st Century Fox.
Standard Chartered was on the front foot after saying it will resume its dividend as it swung to a net profit of $774m for 2017 from a loss of $478m the year before.
Doorstep lender Provident Financial surged as investors welcomed the announcement of a smaller-than-expected rights issue, although the company also said it swung to a pre-tax loss in 2017 from a profit the year before.
Engineer GKN, which is currently fending off a hostile bid from turnaround specialist Melrose Industries, posted a 125% jump in full-year reported pre-tax profit.
Housebuilder Persimmon rose sharply as it pledged to pay out double its previously promised surplus cash via bumper dividends over this and the next two years and reported profits growth and encouraging recent sales. Peers Barratt Developments, Berkeley and Taylor Wimpey all gained.
Insurer Direct Line advanced as it announced bumper dividend payments and posted a more than 50% increase in annual operating profit, while Derwent London was up as it proposed a special dividend and said net asset value rose in 2017.
FTSE 250 challenger bank Virgin Money rallied after it reported a 28% increase in underlying full-year profit amid robust customer demand and growth across its core products.
Greggs gained after well-received full-year numbers, while Draxpowered ahead as its full-year core earnings beat expectations.
Speciality chemical company Croda International declined even as it posted a record full-year profit as sales grew thanks to a strong performance across sectors and regions.
Investors were also wading through results from Inchcape,James Fisher, Morgan Advanced Materials, Elementis andCoats Group in the morning’s blizzard of corporate news.
