London open: Stocks rise as investors eye Powell, US inflation

10th Jul 2024 07:59

(Sharecast News) - London stocks rose in early trade on Wednesday as investors turned their attention to Federal Reserve chair Jerome Powell's second day of testimony to Congress and to this week's US inflation reading.

At 0825 BST, the FTSE 100 was up 0.3% at 8,161.43.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "The FTSE 100 has opened on the front foot, taking cues from unruffled markets in the US despite a continued lack of clarity about when interest rate cuts will come.

"Fed Chair Jerome Powell offered few clues about when monetary policy will be eased during his congressional testimony. Policymakers are keeping a close eye on whether restrictive rates are squeezing enough demand out of the economy and, while the one hand, he said the Labour market had cooled, it was still 'robust.' There is still an expectation that a rate cut could come in September, but beyond that there is still much uncertainty.

"Nevertheless, US indices are still hanging close to record highs, with enthusiasm over AI possibilities and hopes for a soft landing for the economy still buoying sentiment. Eyes will now be drawn to tomorrow's consumer price inflation report for indications about the future direction of travel. Another shift lower in headline inflation is expected, which should help maintain the largely optimistic outlook. A reading of 3.1% year-on-year is expected in June, down from 3.3% in May."

In equity markets, BA and Iberia owner IAG flew to the top of the FTSE 100 after an upgrade to 'overweight' at Morgan Stanley. Budget carrier easyJet followed close behind.

Travis Perkins was up as it announced the appointment of Pete Redfern - the former boss of Taylor Wimpey - as its new chief executive.

Food outlet operator SSP Group surged as it held annual guidance after third-quarter sales rose 16%, driven by increasing demand for leisure travel. Like-for-like revenue was up 6%.

On the downside, Barratt Developments fell even as the housebuilder said annual profits were set to come in ahead of expectations despite a "challenging" economic backdrop.

Direct Line lost ground as it put out an update ahead of its capital markets day. The insurer reiterated its target of at least £100m of gross run-rate cost savings by exit 2025 and its target of a 13% net insurance margin in 2026. It also announced that it will be putting itself on price comparison websites for the first time.

Grafton was in the red as the building and DIY supplies group said revenue fell 4.4% in the first six months of the year amid challenging trading conditions as consumers held back on discretionary spending.

Wetherspoons nudged down despite saying it expects profits to hit market expectations as it closes out its financial year with strong sales momentum.

Market Movers

FTSE 100 (UKX) 8,161.43 0.27%

FTSE 250 (MCX) 20,655.66 0.05%

techMARK (TASX) 4,775.33 0.43%

FTSE 100 - Risers

International Consolidated Airlines Group SA (CDI) (IAG) 177.80p 2.83%

easyJet (EZJ) 473.30p 1.70%

Airtel Africa (AAF) 119.30p 1.45%

Next (NXT) 8,798.00p 1.43%

Sainsbury (J) (SBRY) 257.80p 1.34%

Rentokil Initial (RTO) 471.70p 1.24%

Associated British Foods (ABF) 2,465.00p 1.15%

Marks & Spencer Group (MKS) 293.60p 1.14%

Prudential (PRU) 722.40p 1.01%

Fresnillo (FRES) 591.00p 0.94%

FTSE 100 - Fallers

Barratt Developments (BDEV) 480.00p -2.28%

Pershing Square Holdings Ltd NPV (PSH) 4,198.00p -1.13%

Rio Tinto (RIO) 5,166.00p -1.00%

Taylor Wimpey (TW.) 149.70p -0.66%

Glencore (GLEN) 474.15p -0.40%

Smith (DS) (SMDS) 418.40p -0.38%

Vistry Group (VTY) 1,267.00p -0.31%

Darktrace (DARK) 586.20p -0.31%

Smurfit Westrock (DI) (SWR) 3,500.00p -0.28%

Mondi (MNDI) 1,528.50p -0.23%

FTSE 250 - Risers

Discoverie Group (DSCV) 731.00p 3.98%

Indivior (INDV) 786.00p 3.90%

Premier Foods (PFD) 170.00p 3.03%

Travis Perkins (TPK) 824.50p 2.93%

Paragon Banking Group (PAG) 757.00p 2.92%

IP Group (IPO) 43.00p 2.50%

Spectris (SXS) 2,962.00p 2.42%

Domino's Pizza Group (DOM) 318.00p 2.38%

Close Brothers Group (CBG) 485.80p 1.76%

NextEnergy Solar Fund Limited Red (NESF) 81.10p 1.76%

FTSE 250 - Fallers

Grafton Group Ut (CDI) (GFTU) 911.30p -3.21%

SThree (STEM) 423.00p -3.20%

Grainger (GRI) 233.00p -2.31%

Direct Line Insurance Group (DLG) 188.50p -2.28%

Redrow (RDW) 680.50p -2.16%

Asia Dragon Trust (DGN) 411.00p -1.91%

PPHE Hotel Group Ltd (PPH) 1,300.00p -1.89%

ITV (ITV) 81.50p -1.81%

Wood Group (John) (WG.) 191.20p -1.65%

Plus500 Ltd (DI) (PLUS) 2,160.00p -1.64%iag shar