London open: FTSE hits fresh post-pandemic high amid deal news

London stocks rose in early trade on Friday, with the top-flight index hitting a new post-pandemic high as deal news and strong commodity prices provided a boost ahead of the latest US non-farm payrolls report.

At 0900 BST, the FTSE 100 was up 0.4% at 7,101.95.

Neil Wilson, chief market analyst at Markets.com said: "The overriding market themes remain pretty well unabused: A monster commodity rally continues as the global economy heats up, and massive but messy rotation out of the tech/growth/momentum plays into more cyclical/value parts of the market.

"Copper rallied to an all-time high, aluminium is extending gains. Palm oil 13-year high, iron ore and steel at all-time highs. There is yet room to run higher in the commodity space."

On the data front, the payrolls report is due at 1330 BST, along with the unemployment rate and average earnings. On home shores, meanwhile, UK construction PMI is at 0930 BST.

Wilson said that after Wednesday’s "good" ADP numbers, the outlook is good and expectations are high for the non-farm payrolls. "Something like 1m jobs are expected to have been created by US employers last month, topping the total for March," he said.

"The question really is how fast the labour market can make up the still roughly 8m jobs lost since the pandemic, at which point the Fed will, by its own policy stance, considering tightening monetary policy."

In equity markets, deal news was helping the lift the mood.

St Modwen Properties surged after US private equity firm Blackstone made a possible cash offer for the group at 542p a share.

Meggitt also jumped following a report that US-based Woodward could be looking to buy the London-listed aerospace engineer. According to Dealreporter, Woodward is working with an investment bank as it considers potential deals and Meggitt is in the frame.

Engine maker Rolls-Royce and GKN owner Melrose Industries also rose.

Wickes Group gained as Citi initiated coverage of the shares at ‘buy’ following the demerger from Travis Perkins.

British Airways owner IAG was a touch weaker after it reported a first-quarter operating loss of €1.06bn and pulled full-year guidance as the Covid pandemic continued to batter the airline industry.

InterContinental Hotels was little changed as it said trading improved in the first quarter and that a pickup in March continued into April, particularly in the US and China.

Market Movers

FTSE 100 (UKX) 7,101.95 0.36%
FTSE 250 (MCX) 22,637.45 0.65%
techMARK (TASX) 4,371.86 0.88%

FTSE 100 - Risers

Rolls-Royce Holdings (RR.) 106.22p 2.73%
Melrose Industries (MRO) 168.55p 2.18%
Barclays (BARC) 180.60p 1.98%
Pearson (PSON) 840.60p 1.72%
Sainsbury (J) (SBRY) 249.90p 1.46%
Compass Group (CPG) 1,596.00p 1.43%
Legal & General Group (LGEN) 285.10p 1.35%
Informa (INF) 569.40p 1.32%
Royal Dutch Shell 'B' (RDSB) 1,373.20p 1.24%
Anglo American (AAL) 3,304.00p 1.18%

FTSE 100 - Fallers

Antofagasta (ANTO) 1,899.00p -1.35%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,030.00p -1.00%
United Utilities Group (UU.) 977.60p -0.77%
Severn Trent (SVT) 2,475.00p -0.72%
BT Group (BT.A) 170.05p -0.67%
Berkeley Group Holdings (The) (BKG) 4,725.00p -0.57%
National Grid (NG.) 928.50p -0.57%
Unilever (ULVR) 4,281.50p -0.53%
Croda International (CRDA) 6,714.00p -0.47%
Entain (ENT) 1,646.50p -0.42%

FTSE 250 - Risers

St. Modwen Properties (SMP) 533.00p 19.11%
Meggitt (MGGT) 530.00p 15.22%
Provident Financial (PFG) 265.00p 7.29%
Virgin Money UK (VMUK) 208.20p 4.31%
AO World (AO.) 253.20p 3.77%
Wickes Group (WIX) 252.00p 3.07%
Hill & Smith Holdings (HILS) 1,498.00p 2.74%
Frasers Group (FRAS) 557.00p 2.58%
Coats Group (COA) 59.80p 2.57%
Caledonia Investments (CLDN) 3,085.00p 2.32%

FTSE 250 - Fallers

Syncona Limited NPV (SYNC) 225.50p -4.85%
John Laing Group (JLG) 369.00p -2.84%
Aston Martin Lagonda Global Holdings (AML) 1,838.50p -2.78%
Energean (ENOG) 862.00p -1.49%
Bytes Technology Group (BYIT) 487.60p -1.22%
Unite Group (UTG) 1,157.50p -1.11%
Chrysalis Investments Limited NPV (CHRY) 194.50p -1.02%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,030.00p -1.00%
Cineworld Group (CINE) 92.00p -0.90%
Hochschild Mining (HOC) 193.50p -0.87%