London open: Stocks gain ahead of key policy announcements; HSBC results in focus

London stocks rose in early trade on Monday as investors mulled results from the likes of HSBC and Pearson, and looked ahead to a series of key central bank policy announcements this week.

At 0845 GMT, the FTSE 100 was up 0.8% at 7,351.45.

Rate decisions are due this week from the Bank of England, the Bank of Japan and the US Federal Reserve.

The BoE is expected to keep interest rates unchanged on Thursday.

Tickmill Group said: "The LSEG's assessment shows a 90% probability that the BoE will maintain the current rates. While the BoE is likely to hold rates steady, the market remains divided on whether there could be another rate hike later this year.

"According to a recent Reuters poll, 16 out of 28 respondents indicated that the likelihood of another rate hike this year is high. The BoE's messaging and the language in its policy statement will be crucial in shaping market expectations. The central bank's communication will play a significant role in determining whether or not a rate increase is anticipated in the near future."

On the macro front, net lending and mortgage approvals figures are due out at 0930 GMT.

In equity markets, Airtel Africa jumped to the top of the FTSE 100 as it reported a rise in half-year revenues and said it expects to deliver an improved EBITDA margin in FY24 versus a year earlier.

Ascential rocketed after agreeing to sell its digital commerce business and its product design business, WGSN, for a combined £1.4bn. The digital commerce business will be sold to Omnicom for around £741m, while WGSN will be sold to Apax Partners for up to £700m.

HSBC was firmer after it posted a smaller-than-expected jump in third-quarter profits and announced a $3bn share buyback. In the three months to the end of September, pre-tax profit rose to $7.7bn from $3.2bn in the same period a year earlier, falling short of consensus expectations of $8.1bn.

Matt Britzman, equity analyst at Hargreaves Lansdown: "There wasn’t much in these results to upset the apple cart and the fresh buyback is testament to a strong capital position.

"HSBC is the only major UK-listed bank to still be up year-to-date after Standard Chartered left the club last week. Yet the valuation still looks downbeat, paving the way for some impressive investor returns."

Education publisher Pearson advanced as it lifted its profit guidance for the full year by £20m despite a slowdown in revenue growth in the third quarter.

Mike Ashely’s Frasers Group gained after saying it had sold the Missguided fast-fashion brand to Shein for an undisclosed sum, and hinted at further potential collaborations with the Chinese ecommerce giant.

Market Movers

FTSE 100 (UKX) 7,351.45 0.83%
FTSE 250 (MCX) 17,016.27 0.89%
techMARK (TASX) 3,984.20 0.82%

FTSE 100 - Risers

Airtel Africa (AAF) 116.80p 6.38%
WPP (WPP) 714.00p 2.70%
St James's Place (STJ) 635.00p 2.68%
Rightmove (RMV) 492.00p 2.67%
Smiths Group (SMIN) 1,604.00p 2.17%
Prudential (PRU) 861.40p 2.16%
Informa (INF) 715.40p 1.94%
Centrica (CNA) 158.00p 1.87%
Legal & General Group (LGEN) 211.10p 1.73%
Weir Group (WEIR) 1,709.00p 1.70%

FTSE 100 - Fallers

B&M European Value Retail S.A. (DI) (BME) 520.40p -0.31%
Ocado Group (OCDO) 481.40p -0.29%
Marks & Spencer Group (MKS) 214.00p -0.23%
NATWEST GROUP (NWG) 181.60p -0.22%
Shell (SHEL) 2,702.00p 0.06%
Scottish Mortgage Inv Trust (SMT) 643.20p 0.06%
Diploma (DPLM) 2,818.00p 0.07%
Halma (HLMA) 1,824.50p 0.08%
Dechra Pharmaceuticals (DPH) 3,784.00p 0.11%
Sainsbury (J) (SBRY) 256.00p 0.20%

FTSE 250 - Risers

Ascential (ASCL) 294.60p 36.64%
CAB Payments Holdings (CABP) 49.63p 4.36%
Ruffer Investment Company Ltd Red PTG Pref Shares (RICA) 273.00p 4.20%
Dr. Martens (DOCS) 119.00p 3.48%
4Imprint Group (FOUR) 5,040.00p 2.86%
Renishaw (RSW) 3,034.00p 2.85%
TUI AG Reg Shs (DI) (TUI) 422.40p 2.67%
Bakkavor Group (BAKK) 86.60p 2.61%
Ashmore Group (ASHM) 171.90p 2.50%
Darktrace (DARK) 350.20p 2.46%

FTSE 250 - Fallers

Mitchells & Butlers (MAB) 199.90p -2.39%
Baillie Gifford Japan Trust (BGFD) 636.00p -1.70%
VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 433.00p -1.03%
JPMorgan Japanese Inv Trust (JFJ) 436.50p -1.02%
Templeton Emerging Markets Inv Trust (TEM) 142.00p -0.84%
GCP Infrastructure Investments Ltd (GCP) 60.60p -0.82%
Ithaca Energy (ITH) 162.70p -0.79%
Witan Inv Trust (WTAN) 209.00p -0.71%
RHI Magnesita N.V. (DI) (RHIM) 2,500.00p -0.64%
Indivior (INDV) 1,566.00p -0.63%