London open: Earnings focus sees stocks start stronger

London stocks were in positive territory on Friday morning, following a solid session on Wall Street overnight, as investors waded through another flood of earnings reports.

At 0902 BST, the FTSE 100 was up 0.36% at 7,536.58, and the FTSE 250 was ahead 0.83% at 20,790.14.

“European markets have opened stronger on the final session of the month, with earnings front-and-centre again,” said Interactive Investor head of investment Victoria Scholar.

“Last night, Meta lifted the US equity market with the Nasdaq closing up by more than 3%, while the VIX volatility index shed 3.5%.

“There’s a sense of ebullience to round up a torrid month across global markets with a sea of green across Asia and positive momentum carrying forward to the European session.”

On the economic front, a closely-watched survey showed UK house price growth slowing more than expected in April amid the ongoing squeeze on household incomes and rising interest rates.

According to lender Nationwide, house prices rose at a month-on-month pace of 0.3%, which marked their slowest clip since September.

That dragged the annual rate of increase down to 12.1% from 14.3% in March, below consensus expectations for 12.6%.

“Nevertheless, it is surprising that conditions have remained so buoyant, given mounting pressure on household budgets which has severely dented consumer confidence," said Nationwide chief economist Robert Gardner.

Gardner attributed that to the strikingly large proportion of Britons, 38%, who were either moving or planning to do so, as per the results of a separate survey conducted by Nationwide.

Elsewhere, industry research showed the number of shops standing empty fell in the first quarter, as the UK economy reopened following the worst of the pandemic.

According to the latest BRC-LDC Vacancy Monitor, the overall vacancy rate decreased to 14.1% in the first three months of the year, 0.3 percentage points down on the fourth quarter and only the second quarter of falling vacancy rates since the start of 2018.

All locations reported falls, with vacancies easing to 14.1% from 14.4% three months earlier on the high street and to 19.0% from 19.1% in shopping centres.

In retail parks, the number of empty shops eased by 0.7 percentage points to 10.6%.

“The economy has fully reopened, with more city workers back in the office and more tourists out on the streets,” said Helen Dickinson, chief executive of the British Retail Consortium.

“This allowed some businesses to grow and invest in repurposing and reopening empty units, especially in retail parks and high streets.”

In equities, packaging company Smurfit Kappa was in the green, after reporting that both revenue and underlying earnings had grown by a third in the three months ended 31 March as a result of "significant, ongoing capital investment" it had made.

The firm said revenues were up 33% year-on-year at €3.02bn, while EBITDA had also grown 33% to €514.0m, with an EBITDA margin of 17% for the period.

NatWest was managing small gains after it reported soaring first quarter profit driven by a rise in interest rates and income.

The state-backed bank said pre-tax profits for the three months to 31 March rose 41% to £1.2bn, up from £885m the previous year, and ahead of the £755m average of analyst forecasts compiled by the bank.

Education publisher Pearson was up after saying it would receive a one-off tax boost this fiscal year as it maintained annual guidance.

The company on Friday said its effective tax rate would fall to 15-17% from 21% after the statute of limitations lapsed on a number of provisions.

On the downside, building materials supplier Travis Perkins was falling after it said higher prices would form a higher proportion of sales growth this year due to inflation, as it posted a rise in first-quarter sales and maintained guidance.

Its total sales for the three months to 31 March were up 13.6%.

“The group's forecast for materials price inflation, which was originally expected to ease into the second half of the year, is now more uncertain with pricing likely to form a higher proportion of sales growth across the year than previously thought,” the company said.

Elsewhere, manufacturer Rotork was falling despite trading in line with internal expectations in the first quarter, with order intake growing "high-single digits" year-on-year on an organic constant currency basis, as a fresh wave of Covid cases in China led to the shuttering of its key Shanghai factory.

Computer services provider Computacenter was tumbling after it reported "strong top-line growth" in the first quarter, with growth in adjusted pre-tax profits at a more modest level due to a "very large volume customer" diluting overall margins.

Market Movers

FTSE 100 (UKX) 7,546.85 0.50%
FTSE 250 (MCX) 20,789.25 0.82%
techMARK (TASX) 4,366.32 0.14%

FTSE 100 - Risers

Mondi (MNDI) 1,515.50p 3.73%
Aveva Group (AVV) 2,123.00p 3.36%
Scottish Mortgage Inv Trust (SMT) 914.20p 3.16%
Smurfit Kappa Group (CDI) (SKG) 3,365.00p 2.87%
Ocado Group (OCDO) 936.40p 2.79%
Dechra Pharmaceuticals (DPH) 3,666.00p 2.57%
Sainsbury (J) (SBRY) 234.50p 2.54%
Intermediate Capital Group (ICP) 1,558.50p 2.23%
Melrose Industries (MRO) 119.00p 2.19%
Burberry Group (BRBY) 1,607.00p 2.16%

FTSE 100 - Fallers

Hikma Pharmaceuticals (HIK) 1,943.50p -4.21%
Hargreaves Lansdown (HL.) 919.40p -1.92%
Vodafone Group (VOD) 124.78p -1.78%
National Grid (NG.) 1,209.50p -1.31%
Severn Trent (SVT) 3,142.00p -0.82%
United Utilities Group (UU.) 1,155.00p -0.82%
Avast (AVST) 564.40p -0.63%
International Consolidated Airlines Group SA (CDI) (IAG) 143.84p -0.48%
Flutter Entertainment (CDI) (FLTR) 8,004.00p -0.45%
GlaxoSmithKline (GSK) 1,803.00p -0.41%

FTSE 250 - Risers

Johnson Matthey (JMAT) 1,961.00p 4.78%
Fidelity China Special Situations (FCSS) 248.50p 3.97%
International Public Partnerships Ltd. (INPP) 168.20p 3.83%
Dr. Martens (DOCS) 218.40p 3.80%
Marshalls (MSLH) 621.00p 3.50%
Carnival (CCL) 1,291.00p 3.32%
Coats Group (COA) 70.10p 3.24%
Oxford Biomedica (OXB) 562.00p 3.12%
Tullow Oil (TLW) 57.20p 3.06%
IWG (IWG) 249.10p 2.89%

FTSE 250 - Fallers

Computacenter (CCC) 2,616.00p -4.46%
Cranswick (CWK) 3,294.00p -4.30%
Currys (CURY) 94.05p -2.69%
Rotork (ROR) 296.60p -1.85%
Travis Perkins (TPK) 1,244.50p -1.78%
Indivior (INDV) 325.00p -1.69%
HGCapital Trust (HGT) 421.00p -1.64%
Wizz Air Holdings (WIZZ) 3,210.00p -1.41%
Unite Group (UTG) 1,148.00p -1.20%
Network International Holdings (NETW) 265.00p -0.90%