London open: FTSE gains ahead of Powell speech; energy price cap jumps 80%
London stocks rose in early trade on Friday following a positive session on Wall Street, as investors eyed a speech by US Federal Reserve chair Jerome Powell at the Jackson Hole symposium.
At 0820 BST, the FTSE 100 was up 0.5% at 7,520.48,
On home shores, Ofgem struck fear into the hearts of Britons again after it raised the maximum that suppliers can charge to £3,549 a year. The regulator announced an 80% increase on the current price cap of £1,971 for the average dual-fuel tariff.
The new cap will affect 24 million households - about 85% of the population. Ofgem chief executive Jonathan Brearley cited Russia’s invasion of Ukraine and cuts in supplies to Europe had for higher wholesale gas prices.
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: "While the cap changes have been known about for some time, this change will still come as a shock when the reality of these figures sink in. It’s likely to result in a further cooling of demand for discretionary items, and an increase in people struggling to purchase even the basics. This increases the focus on Truss and Sunak, who will be under immediate and heavy pressure to do something about the situation.
"Whether tax cuts favoured by the Truss camp, or emergency payments preferred by Sunak, the reality is the energy crisis and its effects aren’t going away until the external forces at play are brought under control.
"The FTSE 100 is contemplating the tough consumer backdrop brought on by the new cap, with no corporate news to change the tide, and has settled on reserved optimism by opening up 47 points. This follows a mildly positive trading session in the US. Investors are waiting for Federal Reserve chair Jerome Powell’s Jackson Hole speech later. Expectations are that Powell will push back against ideas of a policy pivot, and will instead reiterate plans to get inflation back under control."
In equity markets, shares of software maker Micro Focus rocketed after it agreed a £5.1bn takeover by Canadian rival OpenText. The offering is £5.32 per share, a 98% premium on Micro Focus’s current share price, which has fallen 87% over the past three years.
Elsewhere, Haleon and GlaxoSmithKline both gained. In a research note on Friday, Citi opened "positive catalyst" watches on GSK and Sanofi following a tentative ruling by a South Florida district judge that could mean the settlement on heartburn drug Zantac is significantly lower than currently being priced in to GSK, Sanofi and Haleon shares.
Market Movers
FTSE 100 (UKX) 7,520.48 0.54%
FTSE 250 (MCX) 19,301.46 0.23%
techMARK (TASX) 4,312.48 0.36%
FTSE 100 - Risers
Haleon (HLN) 271.35p 2.94%
GSK (GSK) 1,425.20p 2.50%
Anglo American (AAL) 2,970.50p 1.75%
Antofagasta (ANTO) 1,186.50p 1.67%
Rio Tinto (RIO) 5,026.00p 1.51%
Harbour Energy (HBR) 480.70p 1.50%
Barratt Developments (BDEV) 435.70p 1.30%
Persimmon (PSN) 1,503.00p 1.21%
HSBC Holdings (HSBA) 528.80p 1.21%
Prudential (PRU) 926.80p 1.13%
FTSE 100 - Fallers
Informa (INF) 553.00p -1.25%
Relx plc (REL) 2,359.00p -1.05%
Auto Trader Group (AUTO) 659.20p -0.60%
Entain (ENT) 1,274.50p -0.51%
Flutter Entertainment (CDI) (FLTR) 10,900.00p -0.37%
London Stock Exchange Group (LSEG) 8,382.00p -0.33%
Aveva Group (AVV) 2,760.00p -0.33%
InterContinental Hotels Group (IHG) 4,952.00p -0.28%
Kingfisher (KGF) 232.30p -0.26%
RS Group (RS1) 1,127.00p -0.18%
FTSE 250 - Risers
Synthomer (SYNT) 206.40p 2.18%
Softcat (SCT) 1,344.00p 1.97%
Ferrexpo (FXPO) 150.00p 1.90%
BlackRock World Mining Trust (BRWM) 648.00p 1.57%
Royal Mail (RMG) 270.10p 1.50%
Aston Martin Lagonda Global Holdings (AML) 440.00p 1.36%
XP Power Ltd. (DI) (XPP) 2,025.00p 1.35%
Virgin Money UK (VMUK) 148.90p 1.19%
Hammerson (HMSO) 21.60p 1.17%
ITV (ITV) 64.74p 1.12%
FTSE 250 - Fallers
Greencore Group (CDI) (GNC) 85.00p -3.35%
Genus (GNS) 2,478.00p -1.98%
Premier Foods (PFD) 108.20p -1.64%
Wood Group (John) (WG.) 133.55p -1.26%
RHI Magnesita N.V. (DI) (RHIM) 1,781.00p -1.17%
Alliance Trust (ATST) 987.00p -1.10%
Quilter (QLT) 103.35p -1.01%
TUI AG Reg Shs (DI) (TUI) 132.05p -0.90%
Pets at Home Group (PETS) 317.60p -0.44%
Spire Healthcare Group (SPI) 229.00p -0.43%