London open: Stocks gain ahead of busy week; Reckitt tumbles on litigation fears

London stocks rose in early trade on Monday as investors eyed a week jam-packed with earnings releases and the latest policy announcements from the Federal Reserve and the Bank of England.

At 0845 BST, the FTSE 100 was up 0.6% at 8,335.95.

Richard Hunter, head of markets at Interactive Investor, said earnings season was set to be "at full throttle" in the UK this week.

"Updates from BP and Shell will be among the highlights, in addition to releases from the likes of Diageo, Next, International Consolidated Airlines and Rolls-Royce," he said.

"For the banks, HSBC, Standard Chartered and Barclays will round off the season, hoping to repeat the strong lead given so far from Lloyds Banking and NatWest, where creditable half-year performances were boosted by a strong second quarter.

"There will also be some focus on the Bank of England, which will reveal its latest interest rate decision on Thursday. At present, the consensus is evenly split between a cut and a no-change decision, with the latest economic data having seemingly been unbale to provide a definitive steer. A cut at some point this year is nevertheless expected, although the timing remains on the flip of a coin."

Looking ahead to the rest of the day, net lending, consumer credit and mortgage approvals figures for June are all due at 0930 BST.

Investors were also eyeing a statement to Parliament on Monday afternoon by Chancellor Rachel Reeves, who is expected to reveal cuts to plug a £20bn black hole in public finances.

In equity markets, consumer goods firm Reckitt Benckiser tumbled amid potential litigation concerns, after a US jury found on Friday that formula by Abbott Laboratories had caused a girl to develop bowel disease. Abbott was ordered to pay $495m in damages.

Jefferies said in a research note: "This is likely to depress sentiment on the risk for both cited defendants (Reckitt and Abbott) in these claims, we think.

"RKT share price we estimate is already discounting for circa £3/$3.5bn of liability risk next year. But with its own new individual trial due to start on 30 Sept & MDL class action gaining momentum, that risk may be extended this week we think."

Educational publisher Pearson was also in the red despite saying it delivered a "solid" performance in the first half, with underlying sales and profits ahead of last year, as it reiterated its outlook for the next two years.

Entain fell as it said that BetMGM, its sports betting and iGaming operator in the US, surpassed the $1bn mark for revenues in the first half, but still made a loss as a result of heavy investments during the period.

Food producer Cranswick rose as it held annual guidance after first-quarter revenue rose 6.7% on the back of strong volume growth.

Market Movers

FTSE 100 (UKX) 8,335.95 0.61%
FTSE 250 (MCX) 21,460.57 0.49%
techMARK (TASX) 4,854.22 0.64%

FTSE 100 - Risers

Centrica (CNA) 133.65p 2.61%
Vodafone Group (VOD) 74.54p 2.25%
Prudential (PRU) 699.20p 2.07%
Airtel Africa (AAF) 112.00p 2.00%
Legal & General Group (LGEN) 232.20p 1.80%
BP (BP.) 461.95p 1.61%
SEGRO (SGRO) 906.20p 1.59%
Lloyds Banking Group (LLOY) 61.34p 1.59%
JD Sports Fashion (JD.) 125.30p 1.58%
3i Group (III) 3,074.00p 1.52%

FTSE 100 - Fallers

Reckitt Benckiser Group (RKT) 4,149.00p -7.51%
Pearson (PSON) 1,007.50p -4.14%
Entain (ENT) 637.40p -1.79%
International Consolidated Airlines Group SA (CDI) (IAG) 166.35p -0.48%
Rentokil Initial (RTO) 466.40p -0.30%
Diageo (DGE) 2,560.00p -0.21%
Burberry Group (BRBY) 745.60p -0.21%
Rightmove (RMV) 560.20p -0.21%
Coca-Cola HBC AG (CDI) (CCH) 2,840.00p -0.21%
InterContinental Hotels Group (IHG) 7,998.00p -0.20%

FTSE 250 - Risers

PZ Cussons (PZC) 109.00p 2.44%
NCC Group (NCC) 149.80p 2.18%
Bank of Georgia Group (BGEO) 4,700.00p 2.17%
IP Group (IPO) 41.60p 2.09%
Petershill Partners (PHLL) 222.00p 2.07%
Genuit Group (GEN) 507.00p 2.01%
Workspace Group (WKP) 630.00p 1.94%
Cranswick (CWK) 4,625.00p 1.87%
CMC Markets (CMCX) 329.50p 1.85%
Morgan Advanced Materials (MGAM) 339.50p 1.80%

FTSE 250 - Fallers

Energean (ENOG) 1,049.00p -4.20%
Lancashire Holdings Limited (LRE) 616.00p -2.22%
Patria Private Equity Trust (PPET) 556.00p -1.77%
Impax Environmental Markets (IEM) 391.00p -1.26%
VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 481.50p -1.13%
Ocado Group (OCDO) 441.00p -1.10%
Schroder Oriental Income Fund Ltd. (SOI) 271.50p -1.09%
Drax Group (DRX) 638.00p -1.09%
Kainos Group (KNOS) 1,126.00p -1.05%
BlackRock Greater Europe Inv Trust (BRGE) 597.00p -1.00%