London open: Stocks gain as consumer confidence hits two-year high

London stocks rose in early trade on Friday as investors mulled an upbeat consumer confidence survey and looked ahead to the release of key US inflation data.

At 0830 GMT, the FTSE 100 was up 0.8% at 7,590.15.

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: "The big names of the UK stock market have been lifted higher in the final trading session of the week. Stocks have been given a boost from better-than-expected economic data in the US yesterday.

"Our friends across the pond are seeing economic growth outstrip expectations, while also enjoying the fact that inflation pressures are reducing, according to the personal consumption expenditures index. There are still a lot of plates for the Federal Reserve to spin, and all eyes will now be on PCE numbers later today, which are a favoured inflation gauge.

"The FTSE has also been lifted by news of UK consumer confidence hitting a two-year high. GfK’s consumer confidence index pushed to minus 19 in January, from minus 22. So while there’s still clearly further room for things to improve, the average consumer’s concerns are reducing as hopes for interest rate cuts and lower inflation trickle through. Retailers who have faced a tough Christmas will be hoping these better moods translate into improved spending."

The US PCE figures for December are due at 1330 GMT.

On home shores, the latest GfK survey showed that consumer confidence continued to improve in January to its best level in two years.

GfK’s consumer confidence index increased three points to -19 in January, with shoppers more optimistic about their personal finance situation.

"Consumer confidence has started the year well with all measures up...the best since January 2022. Importantly, the view on our personal financial situation for the coming year has gained two points and now stands at zero," said Joe Staton, client strategy director at GfK.

"This is exciting as it ends 24 consecutive months of negative scores for this measure and this significant change is the best single indicator for how the nation’s households feel about their income and expenditure."

In equity markets, Diageo surged to the top of the FTSE 100 after well-received third-quarter results from French spirits maker Remy Cointreau.

Luxury brand Burberry also racked up strong gains after solid results from Louis Vuitton and Christian Dior owner LVMH.

WH Smith rallied as it posted an 8% jump in total group revenues for the 20 weeks to 20 January 2024, hailing particularly strong momentum in the travel business. Total sales in the travel segment were up 13% on the same period a year earlier, or 16% on a constant currency basis.

Total revenue in Travel UK - the company’s largest segment - rose 15% on the same period a year earlier, or 14% on a like-for-like basis. WH Smith said it continues to see improving passenger numbers across UK Air, and a strong performance in Hospitals, while Rail is performing well.

Saga pushed higher as it said it was considering options for its cruse business, including a partnership arrangement.

Fashion brand Superdry also rose despite reporting a substantial drop in group sales in the first half and saying there was no let-up in the "challenging" trading conditions over Christmas as it painted a gloomy outlook for the full year.

Market Movers

FTSE 100 (UKX) 7,590.15 0.80%
FTSE 250 (MCX) 19,210.55 -0.07%
techMARK (TASX) 4,368.72 0.34%

FTSE 100 - Risers

Diageo (DGE) 2,822.50p 4.15%
Burberry Group (BRBY) 1,315.50p 2.89%
Rentokil Initial (RTO) 399.90p 1.89%
Shell (SHEL) 2,436.00p 1.88%
Barclays (BARC) 147.94p 1.76%
BP (BP.) 463.40p 1.70%
Unilever (ULVR) 3,787.00p 1.58%
HSBC Holdings (HSBA) 613.40p 1.41%
AstraZeneca (AZN) 10,594.00p 1.40%
Croda International (CRDA) 4,576.00p 1.31%

FTSE 100 - Fallers

InterContinental Hotels Group (IHG) 7,372.00p -1.55%
Scottish Mortgage Inv Trust (SMT) 769.20p -1.18%
Flutter Entertainment (CDI) (FLTR) 15,840.00p -1.06%
Rolls-Royce Holdings (RR.) 303.50p -0.98%
F&C Investment Trust (FCIT) 943.00p -0.95%
Antofagasta (ANTO) 1,656.50p -0.93%
JD Sports Fashion (JD.) 115.45p -0.90%
Melrose Industries (MRO) 576.20p -0.83%
Barratt Developments (BDEV) 530.40p -0.82%
Persimmon (PSN) 1,449.50p -0.82%

FTSE 250 - Risers

Morgan Sindall Group (MGNS) 2,335.00p 4.47%
Me Group International (MEGP) 127.60p 3.07%
Spirent Communications (SPT) 128.50p 2.88%
Watches of Switzerland Group (WOSG) 396.20p 2.64%
Genuit Group (GEN) 418.00p 2.33%
Auction Technology Group (ATG) 475.00p 2.15%
Ibstock (IBST) 157.00p 2.01%
Workspace Group (WKP) 529.00p 1.93%
WH Smith (SMWH) 1,251.00p 1.54%
Hill and Smith (HILS) 1,854.00p 1.53%

FTSE 250 - Fallers

Tullow Oil (TLW) 33.00p -4.35%
Baltic Classifieds Group (BCG) 220.00p -3.08%
Dr. Martens (DOCS) 81.90p -2.96%
Trustpilot Group (TRST) 174.70p -2.94%
Mobico Group (MCG) 87.80p -2.44%
Allianz Technology Trust (ATT) 322.00p -1.68%
Impax Environmental Markets (IEM) 371.00p -1.59%
Bellevue Healthcare Trust (Red) (BBH) 147.60p -1.47%
Fidelity China Special Situations (FCSS) 195.80p -1.41%
JPMorgan Emerging Markets Inv Trust (JMG) 101.40p -1.36%