London open: Stocks gain ahead of Fed minutes; SSE powers ahead

London equity markets rose in early trade on Wednesday after stocks on Wall Street closed off their lows, as investors eyed the latest minutes from the US Federal Reserve.

At 0845 BST, the FTSE 100 was up 0.5% at 7,523.73.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: "The feel good factor from earlier in the week has fizzed away but there is still some element of relief washing through the financial markets that the crutch of cheap money isn’t going to be withdrawn quite so quickly.

"Jerome Powell, chair of the US Federal Reserve, soothed fears about ultra-aggressive monetary policy, indicating expectations of 0.75% rate hikes in the months to come were some way off the mark. That helped lift the Dow Jones at the end of the session and has steadied overall market sentiment, with the Hang Seng in Hong Kong up slightly, the Nikkei down marginally and the FTSE 100 set to open in positive territory.

"However, Mr Powell’s comments hinting that policymakers would be more measured is also an indication of concerns about weakness in the global economy. Transatlantic worries are still hovering about looming recessions hitting corporate and consumer spending. Tech stocks continued their tumble on the Nasdaq with Snap’s dramatic fall, pulling down big names like Amazon, Alphabet and Meta."

In equity markets, SSE was the standout gainer on the FTSE 100 after it posted a 23% increase in full-year pre-tax profit. The shares fell sharply on Tuesday on reports that Chancellor Rishi Sunak had ordered a plan for a windfall tax on electricity generators.

Pets at Home advanced after it reported an above-forecast jump in annual profits, driven by strong demand across the pet care market. The company also said remained on course to meet current year profit forecasts.

IT services provider Softcat gained as it said annual operating profit would be slightly ahead of expectations after a strong third quarter.

Marks & Spencer ticked higher as it reported a rise in annual earnings, boosted by a strong performance in food, but warned that growing headwinds could curtail profits in the current year.

Imperial Brands was boosted by an upgrade to ‘buy’ at Goldman Sachs.

On the downside, Ocado slumped after it cut its outlook for Ocado Retail, which is its 50/50 joint venture with M&S. The online supermarket now expects that sales growth in FY22 for Ocado Retail will be in the low single digits rather than the 10% it had guided to previously.

Elsewhere, Darktrace slid after JPMorgan reiterated its ‘underweight’ rating on shares of the cybersecurity firm and slashed the price target to 320p from 400p, saying reputational risk had muddied the investment case further.

Market Movers

FTSE 100 (UKX) 7,523.73 0.53%
FTSE 250 (MCX) 19,969.35 0.60%
techMARK (TASX) 4,416.57 0.20%

FTSE 100 - Risers

SSE (SSE) 1,848.50p 4.67%
Imperial Brands (IMB) 1,845.50p 3.39%
Airtel Africa (AAF) 156.90p 2.82%
Vodafone Group (VOD) 131.90p 2.38%
Glencore (GLEN) 529.00p 1.85%
Rio Tinto (RIO) 5,643.00p 1.84%
Anglo American (AAL) 3,687.00p 1.72%
British American Tobacco (BATS) 3,542.00p 1.53%
Land Securities Group (LAND) 766.80p 1.51%
BP (BP.) 429.90p 1.49%

FTSE 100 - Fallers

Ocado Group (OCDO) 721.00p -5.75%
Sainsbury (J) (SBRY) 228.00p -1.85%
Avast (AVST) 484.90p -1.04%
Hikma Pharmaceuticals (HIK) 1,675.00p -0.89%
ITV (ITV) 70.12p -0.88%
Dechra Pharmaceuticals (DPH) 3,444.00p -0.86%
Burberry Group (BRBY) 1,563.50p -0.86%
Royal Mail (RMG) 311.30p -0.77%
Tesco (TSCO) 256.40p -0.74%
Sage Group (SGE) 661.00p -0.66%

FTSE 250 - Risers

Pets at Home Group (PETS) 297.60p 5.98%
Drax Group (DRX) 735.00p 5.00%
Volution Group (FAN) 372.00p 4.64%
Baltic Classifieds Group (BCG) 137.00p 4.26%
SSP Group (SSPG) 253.50p 3.89%
Centrica (CNA) 86.32p 3.80%
Softcat (SCT) 1,398.00p 3.71%
Ferrexpo (FXPO) 175.80p 3.66%
Jlen Environmental Assets Group Limited NPV (JLEN) 122.80p 3.54%
Energean (ENOG) 1,380.00p 3.06%

FTSE 250 - Fallers

Darktrace (DARK) 337.80p -4.71%
Network International Holdings (NETW) 210.00p -3.85%
Cranswick (CWK) 3,018.00p -3.70%
Greencore Group (CDI) (GNC) 107.30p -2.81%
Polymetal International (POLY) 230.00p -2.13%
Oxford Biomedica (OXB) 472.00p -2.07%
Carnival (CCL) 855.40p -1.90%
Currys (CURY) 77.90p -1.45%
Spectris (SXS) 3,007.00p -1.18%
Aston Martin Lagonda Global Holdings (AML) 620.20p -1.05%