London open: Stocks gain as investors eye CPI, BoE decision

London stocks rose in early trade on Monday as investors eyed a key UK inflation reading and the latest policy announcement from the Bank of England later in the week.

At 0850 BST, the FTSE 100 was up 0.4% at 8,179.33.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "The FTSE 100 has edged into positive territory at the start of a week which will be dominated by speculation over interest rates and the policies touted on the UK General Election campaign.

"Investors are largely shrugging off data from China showing ongoing struggles for the economy. Some of the risk-off sentiment which spread sparked by worries about the far-right gaining legislative power in France has eased off.

"Although the European Central Bank does not look like it’ll be easily propelled into buying French government debt, hopes have risen slightly that spending pledged by the National Rally party would in practice be curtailed in a hung parliament scenario. 10-year French government bond yields edged up slightly to 3.15% but are significantly down on the level they shot up to a week ago of 3.24%."

Looking ahead to the rest of the week, all eyes will be on the latest UK consumer price inflation data due on Wednesday and a policy decision from the Bank of England on Thursday.

Streeter said "there are high hopes are high hopes that inflation’s recent rollercoaster ride may have finally come to a halt back at target".

"After a disappointing reading in April, which saw the CPI index frustratingly hover elusively above 2%, disinflationary pressures are expected to have helped push prices down further. The effect of unemployment ticking up to 4.4% in April may have made some workers more cautious in their spending patterns.

"That certainly showed up in the latest economic growth figures, which showed activity in the retail sectors slowing sharply. May was warm but wet, which may have continued to affect demand. But it doesn’t look like the Bank of England will join the celebratory party immediately and cut interest rates."

Investors were mulling the latest data from China’s National Bureau of Statistics, which showed that retail sales in China smashed forecasts in May, though industrial production growth slowed much more than expected.

On home shores, meanwhile, figures from Nationwide showed house prices were largely unchanged in June following a bumper performance in May.

According to Nationwide’s house price index, house prices were flat in June, dipping just £21 from May’s high to £375,110. Prices sparked 0.8% in May.

Year-on-year, prices rose 0.6% in June, unchanged on May’s 0.6% annual increase.

The number of sales agreed was 6% higher year-on-year, while demand remained stable, up 5%.

May is traditionally a strong period for housing prices, with June weaker in comparison.

In a recent Rightmove poll of 14,000 people, a comfortable majority said the general election on 4 July would not affect plans to move house.

But in the two weeks since Rishi Sunak's surprise announcement, the number of top-end sellers coming to market was 3% lower than a year ago, Rightmove noted, versus being up 11% in the previous fortnight.

Tim Bannister, director of property science at Rightmove, said: "It’s always difficult to predict how home-movers will react to sudden uncertainty, but…[in] previously election campaigns, market activity has remained largely steady.

"This election has followed a similar pattern so far.

"However, some potential sellers appear to be watching and waiting rather than taking action, evidence by the dip in the number of new sellers coming to market, particularly at the top end."

In corporate news, publishing, events and B2B consultancy group Ascential gained as it said trading was in line with expectations for the full year, helped by strong growth in marketing and fintech operations.

B&Q owner Kingfisher ticked up after saying said it had appointed British Land chief financial officer Bhavesh Mistry to the same role at the home improvement company.

Hikma Pharmaceuticals nudged higher after it agreed to buy parts of Xellia Pharmaceuticals, a Copenhagen-based specialty company focusing on providing anti-infective treatments and other critical care therapies, for up to $185m.

Hikma will buy parts of Xellia’s US finished dosage form (FDF) business and assets, including a commercial portfolio and pipeline of differentiated products, a manufacturing facility in Cleveland, Ohio, sales and marketing capabilities, and an R&D centre in Zagreb, Croatia.

SSP was under the cosh after a downgrade to ‘sell’ at Goldman Sachs.

Market Movers

FTSE 100 (UKX) 8,179.33 0.40%
FTSE 250 (MCX) 20,222.44 0.51%
techMARK (TASX) 4,805.26 0.62%

FTSE 100 - Risers

Flutter Entertainment (DI) (FLTR) 14,185.00p 2.53%
Legal & General Group (LGEN) 229.20p 2.00%
Smith (DS) (SMDS) 356.20p 1.77%
Taylor Wimpey (TW.) 150.75p 1.65%
Entain (ENT) 666.80p 1.65%
HSBC Holdings (HSBA) 686.90p 1.49%
Intermediate Capital Group (ICG) 2,224.00p 1.46%
easyJet (EZJ) 454.00p 1.45%
Vodafone Group (VOD) 69.94p 1.42%
Rolls-Royce Holdings (RR.) 464.10p 1.38%

FTSE 100 - Fallers

Rio Tinto (RIO) 5,163.00p -1.07%
Convatec Group (CTEC) 252.40p -0.55%
Anglo American (AAL) 2,378.00p -0.44%
Severn Trent (SVT) 2,466.00p -0.32%
Compass Group (CPG) 2,210.00p -0.32%
Croda International (CRDA) 4,114.00p -0.31%
Glencore (GLEN) 453.15p -0.31%
GSK (GSK) 1,600.00p -0.28%
Unilever (ULVR) 4,441.00p -0.20%
Tesco (TSCO) 309.60p -0.19%

FTSE 250 - Risers

TUI AG Reg Shs (DI) (TUI) 597.50p 4.18%
Elementis (ELM) 145.00p 2.84%
Mobico Group (MCG) 48.38p 2.46%
Jupiter Fund Management (JUP) 76.90p 2.40%
Ashmore Group (ASHM) 176.00p 2.39%
Trainline (TRN) 304.60p 2.21%
PZ Cussons (PZC) 103.40p 2.17%
Wizz Air Holdings (WIZZ) 2,462.00p 2.16%
Oxford Instruments (OXIG) 2,655.00p 2.12%
TR Property Inv Trust (TRY) 322.00p 2.06%

FTSE 250 - Fallers

Caledonia Investments (CLDN) 3,330.00p -1.77%
SSP Group (SSPG) 165.70p -1.72%
JPMorgan Japanese Inv Trust (JFJ) 515.00p -1.72%
RHI Magnesita N.V. (DI) (RHIM) 3,055.00p -1.61%
Lancashire Holdings Limited (LRE) 592.00p -1.17%
Watches of Switzerland Group (WOSG) 385.00p -1.08%
Aston Martin Lagonda Global Holdings (AML) 145.00p -1.02%
Harbour Energy (HBR) 295.00p -0.87%
Barr (A.G.) (BAG) 580.00p -0.85%
Tyman (TYMN) 351.00p -0.85%