London open: Stocks nudge higher; airlines rally on Ryanair results
London stocks were just a touch firmer in early trade on Monday despite solid gains in Asia, but airlines rallied after well-received results from Ryanair.
At 0835 GMT, the FTSE 100 was up 0.1% at 7,422.51.
Stocks racked up solid gains last week after the US Federal Reserve and the Bank of England stood pat on interest rates, sparking hopes that rates have peaked. A softer-than-expected US non-farm payrolls report on Friday added to those hopes.
Victoria Scholar, head of investment at Interactive Investor, said: "The US non-farm payrolls report on Friday saw 150k job additions in October, almost halving from 297k in September and shy of expectations for 180k.
"The weaker data helped to extend last week’s rally with US stocks logging their best week in a year. The S&P 500 gained 5.9% last week while US Treasury yields retreated. Investors are hoping that the Federal Reserve is at the peak of its tightening cycle, also fuelling gains for equities last week after a torrid month for price action in October."
In equity markets, airlines were in the black after Ryanair said it will pay its first ever dividend and posted a 59% jump in first-half profit after tax to €2.18bn, thanks to a strong Easter in the first quarter, record summer traffic and higher fares. IAG, easyjet and Wizz all rose.
Scholar said: "Ryanair has been able to pass on additional cost pressures to consumers through higher airfares with ticket prices likely to continue to go up next year. Plus, it has been enjoying a tailwind from strong demand post pandemic which it expects will be even stronger next year, despite cost-of-living pressures with elevated inflation and interest rates. Ryanair has also been more focussed than rivals on keeping its debt down - the airline expects it will be debt-free by the end of 2026.
"Investors have lots to be cheerful about in this set of results including its better-than-expected earnings, its outlook, and its dividend announcement."
Aerospace group Melrose gained as it signed a new $5bn aftermarket services agreement with engines giant GE Aerospace.
JD Sports was a high riser after Citi initiated coverage of the stock at ‘buy’. "We see a significant opportunity for JD Sports to deploy capital, generating returns above its WACC, with cash generation supported by working capital control," it said.
On the downside, Prudential lost ground after the insurer said new business sales and profits slowed slightly from the half-year stage in the third quarter.
Music rights owner Hipgnosis was under the cosh as it said it will not declare dividends before the new financial year, having undertaken a review of its financial position.
Market Movers
FTSE 100 (UKX) 7,422.51 0.06%
FTSE 250 (MCX) 17,931.80 -0.29%
techMARK (TASX) 4,088.10 -0.09%
FTSE 100 - Risers
Ocado Group (OCDO) 570.40p 5.20%
Melrose Industries (MRO) 507.40p 3.59%
Entain (ENT) 950.80p 3.39%
JD Sports Fashion (JD.) 133.95p 1.98%
International Consolidated Airlines Group SA (CDI) (IAG) 152.35p 1.26%
Rolls-Royce Holdings (RR.) 223.40p 1.13%
Standard Chartered (STAN) 626.00p 1.10%
Rentokil Initial (RTO) 447.00p 1.09%
Anglo American (AAL) 2,226.50p 0.84%
Reckitt Benckiser Group (RKT) 5,456.00p 0.81%
FTSE 100 - Fallers
Land Securities Group (LAND) 606.40p -1.62%
Unite Group (UTG) 937.50p -1.52%
SEGRO (SGRO) 772.00p -1.48%
Prudential (PRU) 887.60p -1.31%
Airtel Africa (AAF) 116.90p -1.18%
Taylor Wimpey (TW.) 112.95p -1.18%
Beazley (BEZ) 533.00p -1.11%
B&M European Value Retail S.A. (DI) (BME) 532.20p -1.08%
DCC (CDI) (DCC) 4,609.00p -0.95%
Admiral Group (ADM) 2,468.00p -0.92%
FTSE 250 - Risers
Keller Group (KLR) 836.00p 4.63%
Aston Martin Lagonda Global Holdings (AML) 220.40p 3.96%
Ceres Power Holdings (CWR) 238.00p 3.48%
Wizz Air Holdings (WIZZ) 1,886.50p 3.28%
easyJet (EZJ) 403.70p 3.20%
Drax Group (DRX) 447.60p 2.10%
IP Group (IPO) 50.00p 1.83%
CAB Payments Holdings (CABP) 69.20p 1.47%
888 Holdings (DI) (888) 87.45p 1.45%
Victrex plc (VCT) 1,506.00p 1.41%
FTSE 250 - Fallers
Hipgnosis Songs Fund Limited NPV (SONG) 68.50p -5.52%
Volution Group (FAN) 366.20p -4.69%
International Distributions Services (IDS) 244.20p -4.24%
Urban Logistics Reit (SHED) 118.20p -2.80%
Moonpig Group (MOON) 161.00p -2.54%
Great Portland Estates (GPE) 419.80p -2.42%
LondonMetric Property (LMP) 175.50p -2.39%
Hammerson (HMSO) 24.14p -2.19%
NextEnergy Solar Fund Limited Red (NESF) 80.40p -2.07%
CLS Holdings (CLI) 96.20p -2.04%