London open: FTSE takes cues from Wall Street 'Santa rally'

London’s stocks returned from the Christmas break in the green on Wednesday, boosted by a late Santa rally on Wall Street overnight.

At 0831 GMT, the FTSE 100 was up 0.5% at 7,736.01.

The positive momentum came after the Dow Jones Industrial Average tacked on 159.36 points overnight on its return from Christmas.

Stephen Innes, managing partner at SPI Asset Management, said US equities were “at or above” an overbought state, although that might not have significant implications if economic data did not warrant a rebuttal.

“Especially as the current market juncture coincides with the onset of the ‘Santa rally’ window, this officially-designated period spans seven sessions, covering the final five sessions of the year and the first two sessions of the new calendar.

“But really, the unofficial Santa Rally window opened in November when Fed Waller dropped the front-end rates anchor.

“Irrespective of the developments this week and early next, 2023 has already witnessed a Santa rally.”

Innes noted that the S&P showed a “remarkable” 16% increase from late October lows through Christmas.

“This robust market performance during the specified period underscores the presence of a Santa rally, leaving little room for doubt.

“Aside from the customary Santa seasonality, any gains witnessed for the remainder of this week may be attributed to the notable increase in the probability of a soft landing, as indicated by the latest round of high-impact macroeconomic data from the United States.”

Boxing day footfall shows some improvement, China industrial profits rise

In a very quiet day for economic news, fresh retail data showed Boxing Day foot traffic saw a slight uptick, with a 1.4% increase in the number of shoppers compared to the last year.

However, when compared to 2019 before the onset of the Covid-19 pandemic and lockdowns, footfall on Boxing Day was still down by about 30%, according to the data from MRI Software, formerly known as Springboard.

Elsewhere, China's industrial profits saw substantial growth in November, marking a double-digit increase of 29.5%, following a 2.7% rise in October.

The surge in profits was underpinned by an overall improvement in manufacturing and a notable upturn in industrial output during the same month.

However, some sectors of the Chinese economy failed to meet expectations due to persistently weak demand.

Despite the positive momentum in November, data from the National Bureau of Statistics (NBS) in Beijing showed that industrial earnings in the first 11 months of 2023 still showed a year-on-year contraction of 4.4%.

This decline, though significant, was still an improvement from the 7.8% drop reported from January to October.

Anglo American up on reports of partial Woodsmith sale

On London’s equity markets, Anglo American was among the top risers amid reports that it was preparing to sell a minority stake in Britain’s biggest mining project.

According to the Times, the mining giant was looking to share the cost of the $9bn Woodsmith fertiliser mine in North Yorkshire, with chief executive Duncan Wanblad reportedly telling City analysts it was moving “at pace to find a partner”.

Elsewhere, AstraZeneca was in the green after it said it was buying Gracell Biotechnologies, a global clinical-stage biopharmaceutical company developing cell therapies for the treatment of cancer and autoimmune diseases, for $1.2bn.

AstraZeneca said it would acquire all of Gracell’s shares at $2 per share in cash, plus a non-tradable contingent value right of 30 cents per ordinary share payable upon achievement of a specified regulatory milestone.

The upfront cash portion represented a 62% premium to Gracell’s closing market price on 22 December.

HgCapital Trust was also moving higher after it announced a partial sale of IRIS Software Group (IRIS) to LGP, a private equity firm based in Los Angeles.

The terms of the transaction were not disclosed, but the transaction valued its investment in IRIS at £99.8m.

HGT said it would receive a net distribution of £42.1m after reinvesting a portion of its proceeds in the business alongside other institutional clients of Hg investing through Hg Saturn.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,738.71 0.00%
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Anglo American (AAL) 1,993.40p 3.19%
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Intertek Group (ITRK) 4,270.00p 1.96%
Entain (ENT) 998.60p 1.90%
Endeavour Mining (EDV) 1,819.00p 1.85%
Scottish Mortgage Inv Trust (SMT) 800.40p 1.83%
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Spirax-Sarco Engineering (SPX) 10,520.00p 1.50%
Ashtead Group (AHT) 5,452.00p 1.45%

FTSE 100 - Fallers

Pearson (PSON) 952.00p -1.20%
Vodafone Group (VOD) 68.57p -0.85%
Smurfit Kappa Group (CDI) (SKG) 3,162.00p -0.75%
BT Group (BT.A) 126.35p -0.75%
Imperial Brands (IMB) 1,808.50p -0.58%
Coca-Cola HBC AG (CDI) (CCH) 2,279.00p -0.44%
Centrica (CNA) 141.30p -0.42%
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Haleon (HLN) 320.45p -0.33%
Melrose Industries (MRO) 565.40p -0.21%

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HGCapital Trust (HGT) 436.50p 2.22%
BBGI Global Infrastructure S.A. NPV (DI) (BBGI) 143.40p 2.14%
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FTSE 250 - Fallers

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SDCL Energy Efficiency Income Trust (SEIT) 63.40p -3.35%
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Sirius Real Estate Ltd. (SRE) 92.60p -1.49%