London open: Stocks gain ahead of US inflation; Tesco, M&S in focus

London stocks rose in early trade on Thursday following gains in the US and Asia, with supermarkets in focus after trading updates from Tesco and Marks & Spencer.

At 0830 GMT, the FTSE 100 was up 0.4% at 7,683.50, as investors eyed the US consumer price index for December at 1330 GMT.

CMC Markets analyst Michael Hewson said the inflation numbers have the potential to either add to the expectation of a rate cut in March, or push it out until later in the year, "with expectations of a tick higher to 3.3%, even as lower gasoline prices exert a loosening of financial conditions to the US consumer".

In equity markets, Antofagasta was the standout gainer on the FTSE 100 after an upgrade to ‘outperform’ from ‘sector perform’ at RBC Capital Markets, which hiked its price target on the stock to 1,800p from 1,300p. It pointed out that a rapid tightening in expected copper supply has brought forward a medium-term bull market.

Premier Inn owner Whitbread advanced as it maintained full-year guidance after a strong rise in accommodation sales during the third quarter, with momentum continuing into the final three months of the financial year.

Tesco gained as it lifted its profit guidance for the full year and delivered an impressive set of third-quarter results, with sales growth picking up sharply during the key Christmas trading period.

Taylor Wimpey nudged higher as the housebuilder said full-year profits would be towards the top of guidance but also cautioned that market remains "uncertain" despite a recent reduction in mortgage rates.

Marks & Spencer was in the red, however, after saying it was set to deliver annual results in line with expectations and reporting an 8.1% rise in sales of the Christmas quarter but warning over higher costs.

Richard Hunter, head of markets at Interactive Investor, said: "The initial share price reaction to the update contains an element of inevitable profit taking after what has been a blistering share price performance, culminating in the group’s return to the FTSE 100 in September.

"In addition, and from here on in, expectations and indeed comparatives are likely to become tougher, although at these levels the shares are not looking especially expensive based on historic valuations. This follows a meteoric rise of 97% in the share price over the last year, as compared to a dip of 0.9% for the wider FTSE 100. The more recent upgrade of the market consensus to a buy is also reflective that investors still have high hopes for a recovery story which is clearly in place."

Trustpilot surged as it announced the launch of a share buyback of up to £20m and said 2023 adjusted underlying earnings were set to be above the top end of market expectations.

Direct Line and Admiral were in focus again, having tumbled on Wednesday amid speculation of a potential clampdown on premium finance. The Financial Conduct Authority said earlier that it has launched an investigation into historical commission agreements at motor finance companies after it found that they were rejecting most of the complaints received.

Market Movers

FTSE 100 (UKX) 7,683.50 0.41%
FTSE 250 (MCX) 19,335.38 0.29%
techMARK (TASX) 4,306.88 0.42%

FTSE 100 - Risers

Antofagasta (ANTO) 1,660.50p 4.90%
Whitbread (WTB) 3,624.00p 2.08%
Anglo American (AAL) 1,855.00p 1.74%
Rio Tinto (RIO) 5,580.00p 1.36%
Ashtead Group (AHT) 5,036.00p 1.35%
Prudential (PRU) 849.60p 1.29%
Legal & General Group (LGEN) 252.60p 1.28%
Tesco (TSCO) 300.10p 1.25%
Land Securities Group (LAND) 698.60p 1.19%
Intertek Group (ITRK) 4,340.00p 1.17%

FTSE 100 - Fallers

Marks & Spencer Group (MKS) 264.40p -4.79%
WPP (WPP) 747.60p -1.55%
SSE (SSE) 1,843.00p -1.07%
Flutter Entertainment (CDI) (FLTR) 12,755.00p -0.70%
Spirax-Sarco Engineering (SPX) 9,926.00p -0.70%
Reckitt Benckiser Group (RKT) 5,580.00p -0.50%
Sainsbury (J) (SBRY) 285.10p -0.49%
Barclays (BARC) 151.92p -0.47%
Rolls-Royce Holdings (RR.) 307.90p -0.42%
Associated British Foods (ABF) 2,327.00p -0.39%

FTSE 250 - Risers

Trustpilot Group (TRST) 163.70p 12.43%
Darktrace (DARK) 360.00p 7.27%
Spirent Communications (SPT) 122.90p 4.86%
Auction Technology Group (ATG) 483.50p 3.98%
easyJet (EZJ) 524.60p 3.02%
Keller Group (KLR) 890.00p 2.18%
Helios Towers (HTWS) 89.90p 2.16%
Workspace Group (WKP) 547.00p 2.15%
Diversified Energy Company (DEC) 1,137.50p 2.11%
Grafton Group Ut (CDI) (GFTU) 913.90p 2.00%

FTSE 250 - Fallers

Ferrexpo (FXPO) 78.60p -3.56%
Volution Group (FAN) 402.60p -3.41%
Rotork (ROR) 304.60p -2.25%
Crest Nicholson Holdings (CRST) 213.40p -2.02%
Ibstock (IBST) 142.40p -2.00%
Pennon Group (PNN) 739.50p -1.66%
Primary Health Properties (PHP) 99.95p -1.62%
Allianz Technology Trust (ATT) 297.00p -1.49%
W.A.G Payment Solutions (WPS) 90.00p -1.32%
TP Icap Group (TCAP) 186.00p -1.12%