London open: FTSE rises after Bostic comments, China data

London stocks rose in early trade Friday following solid US and Asian sessions, as comments from a US Federal Reserve official and encouraging Chinese data underpinned the mood.

At 0820 GMT, the FTSE 100 was up 0.2% at 7,961.22, with sentiment boosted after Atlanta Federal Reserve President Raphael Bostic said he was in favour of "slow and steady" quarter-point US rate increases to limit risk to the economy.

The latest data out of China also helped, as it showed that activity in the services sector picked up more than expected in February amid a recovery in demand.

The Caixin services purchasing managers' index rose to 55.0 from 52.9 in January. This was above consensus expectations for a reading of 54.5 and comfortably above the 50.0 mark that separates contraction from expansion.

Wang Zhe, senior economist at Caixin Insight Group, said: "There was still a lot of optimism in the services sector in February as business owners continued to express great confidence in an economic recovery upon the easing of Covid controls."

Duncan Wrigley, chief China+ economist at Pantheon Macroeconomics, said the data confirms the picture of a "vigorous, early-stage recovery in China".

On home shores, S&P Global’s composite and services PMIs for February are due at 0930 GMT.

In equity markets, miners rallied on the back of the Chinese services data, with Rio Tinto, Anglo and Glencore among the top gainers.

Educational publisher Pearson fell despite reporting a better-than-expected rise in annual profits driven by revenue growth and cost savings. The company also said it would grow sales by low to mid-single digits this year.

Pearson reported an 11% rise in adjusted operating profit to £456m, compared with a company compiled consensus forecast of £446 million.

Revenue rose 5% on an underlying basis to £3.8bn, with increases across most of its divisions with the exception of higher education, which fell 4% driven by a decline in enrolments and a loss of adoptions to non-mainstream publishers, including open educational resources, partially offset by improved pricing.

Property portal Rightmove also lost ground after it posted a rise in full-year operating profit, pointing to "resilient traffic despite a significantly less frenetic property market than 2021".

In the year to the end of December 2022, operating profit was up 7% at £241.3m, with revenues 9% higher at £332.6m.

Rightmove said a total of 16.3bn minutes were spent on the platform during the year, down from 18.3bn in 2021 but still 34% higher than the pre-pandemic record of 2019.

IMI was little changed after the engineering group reported a jump in full-year profits and revenue and hiked its dividend as it said all three divisions had achieved organic revenue growth.

In broker note action, Admiral was knocked lower by a downgrade to ‘neutral’ at Citi, while Hunting slumped after a downgrade to ‘hold’ from ‘buy’ at Berenberg.

Market Movers

FTSE 100 (UKX) 7,961.22 0.22%
FTSE 250 (MCX) 19,910.69 0.30%
techMARK (TASX) 4,645.35 0.17%

FTSE 100 - Risers

Taylor Wimpey (TW.) 119.20p 2.10%
Rio Tinto (RIO) 6,128.00p 1.83%
Ocado Group (OCDO) 535.20p 1.63%
Anglo American (AAL) 3,032.00p 1.44%
Glencore (GLEN) 518.10p 1.39%
Ashtead Group (AHT) 5,662.00p 1.32%
Johnson Matthey (JMAT) 2,201.00p 1.10%
BT Group (BT.A) 142.95p 1.02%
Legal & General Group (LGEN) 258.10p 1.02%
Persimmon (PSN) 1,246.50p 1.01%

FTSE 100 - Fallers

Admiral Group (ADM) 2,093.00p -2.70%
Pearson (PSON) 902.00p -2.23%
Rightmove (RMV) 553.40p -1.84%
BAE Systems (BA.) 915.20p -0.48%
Imperial Brands (IMB) 2,016.00p -0.40%
BP (BP.) 559.20p -0.36%
Shell (SHEL) 2,596.00p -0.33%
Associated British Foods (ABF) 2,016.00p -0.30%
Flutter Entertainment (CDI) (FLTR) 13,295.00p -0.26%
Fresnillo (FRES) 765.60p -0.26%

FTSE 250 - Risers

Domino's Pizza Group (DOM) 299.40p 2.53%
Hilton Food Group (HFG) 750.00p 2.46%
Carnival (CCL) 795.80p 2.45%
FirstGroup (FGP) 108.40p 2.07%
Paragon Banking Group (PAG) 609.50p 1.92%
Serco Group (SRP) 165.00p 1.79%
IMI (IMI) 1,610.00p 1.71%
RHI Magnesita N.V. (DI) (RHIM) 2,666.00p 1.29%
Tritax Big Box Reit (BBOX) 149.40p 1.29%
Intermediate Capital Group (ICP) 1,400.50p 1.27%

FTSE 250 - Fallers

Hunting (HTG) 292.00p -4.42%
Vietnam Enterprise Investments (DI) (VEIL) 558.00p -1.93%
Oxford Instruments (OXIG) 2,585.00p -1.52%
Mitchells & Butlers (MAB) 158.00p -1.19%
Plus500 Ltd (DI) (PLUS) 1,777.00p -1.06%
National Express Group (NEX) 136.00p -1.02%
Molten Ventures (GROW) 371.00p -1.01%
Coats Group (COA) 78.30p -0.89%
Jupiter Fund Management (JUP) 149.70p -0.86%
Pets at Home Group (PETS) 389.60p -0.81%