London open: Stocks gain on US rate cut hopes

5th Jun 2024 08:05

(Sharecast News) - London stocks rose in early trade on Wednesday as weaker-than-expected US jobs data fuelled expectations of a rate cut by the Federal Reserve later this year.

At 0840 BST, the FTSE 100 was 0.3% firmer at 8,253.52.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "The wheel of speculation over when interest rate cuts will come in the US has stopped in a more positive position, buoying sentiment and helping push up the FTSE 100 in early trade.

"Weaker JOLTS jobs data indicates that the negotiating stance of American employees for higher wages is more fragile, adding to hopes that stubborn price pressures will ease. With interest rate cuts spied again on the horizon, Wall Street ended in more upbeat territory, and more optimism is washing through into trading in Europe. The globally focused blue-chip index has also been buoyed by indications that China's recovery also appears more on track.

"Data from a closely watched purchasing managers' survey showed the services sector notched up the fastest growth in ten months in May. The Caixin/S&P Global services PMI rose to 54, from 52.5, with anything over 50 indicating expansion."

Looking ahead to the rest of the day, the S&P Global CIPS UK services PMI for May is due out at 0930 BST, while the US ADP report for May is at 1315 BST. Investors will also be eyeing the latest policy announcement from the Bank of Canada, which is widely expected to cut rates by 25 basis points.

In equity markets, Haleon rallied after an initiation at 'buy' at Berenberg, while Taylor Wimpey was boosted by an upgrade to 'buy' from 'hold' by the same outfit.

Paragon Banking surged to the top of the FTSE 250 as the specialist lender more than doubled interim profit and said it would extend its share buyback by up to £50m as customer demand returned after the 'mini-budget' fiasco of Liz Truss's short-lived government last October.

WH Smith gained as the retailer said it remains on track to hit full-year forecasts despite a slowdown in sales growth in third quarter, as strong growth in the travel division was tempered by falling sales on the high street.

On the downside, B&M European Value Retail slid even as it said annual operating profits and sales grew in the double digits, helped by the opening of 78 gross new stores across the group, with earnings at the top end of guidance.

British Gas owner Centrica was in the red despite saying that current year trading was in line with expectations against the backdrop of a more "normalised" environment.

Workspace lost ground as it reported strong rental income growth in the year to 31 March, but said losses widened substantially due to falling property valuations.

Market Movers

FTSE 100 (UKX) 8,253.52 0.26%

FTSE 250 (MCX) 20,756.46 0.19%

techMARK (TASX) 4,842.95 0.50%

FTSE 100 - Risers

Smith & Nephew (SN.) 1,024.50p 2.94%

Associated British Foods (ABF) 2,615.00p 1.91%

GSK (GSK) 1,645.50p 1.89%

Pearson (PSON) 958.20p 1.76%

Haleon (HLN) 328.20p 1.70%

Entain (ENT) 724.60p 1.48%

Taylor Wimpey (TW.) 151.95p 1.44%

Ocado Group (OCDO) 358.50p 1.36%

St James's Place (STJ) 508.50p 1.29%

Land Securities Group (LAND) 666.00p 1.14%

FTSE 100 - Fallers

B&M European Value Retail S.A. (DI) (BME) 523.20p -4.25%

Centrica (CNA) 137.00p -3.69%

Smith (DS) (SMDS) 372.80p -0.90%

Anglo American (AAL) 2,384.50p -0.79%

HSBC Holdings (HSBA) 685.10p -0.74%

National Grid (NG.) 905.80p -0.66%

Weir Group (WEIR) 2,072.00p -0.48%

Mondi (MNDI) 1,540.00p -0.39%

Frasers Group (FRAS) 894.00p -0.33%

Auto Trader Group (AUTO) 823.60p -0.27%

FTSE 250 - Risers

Paragon Banking Group (PAG) 820.00p 6.49%

PureTech Health (PRTC) 238.50p 3.02%

Elementis (ELM) 157.20p 3.01%

Dunelm Group (DNLM) 1,115.00p 2.58%

IntegraFin Holding (IHP) 366.50p 2.52%

GCP Infrastructure Investments Ltd (GCP) 79.80p 2.44%

TBC Bank Group (TBCG) 2,585.00p 2.38%

Pagegroup (PAGE) 467.00p 2.37%

FirstGroup (FGP) 174.50p 2.35%

Fidelity Special Values (FSV) 316.00p 2.27%

FTSE 250 - Fallers

Octopus Renewables Infrastructure Trust (ORIT) 71.50p -2.59%

Grafton Group Ut (CDI) (GFTU) 987.70p -2.57%

Morgan Sindall Group (MGNS) 2,470.00p -2.56%

TI Fluid Systems (TIFS) 132.60p -2.07%

Workspace Group (WKP) 541.00p -1.81%

Kainos Group (KNOS) 1,142.00p -1.72%

Inchcape (INCH) 797.00p -1.60%

Ruffer Investment Company Ltd Red PTG Pref Shares (RICA) 270.00p -1.46%

Essentra (ESNT) 163.80p -1.44%

Bakkavor Group (BAKK) 145.00p -1.36%