London open: Stocks nudge up ahead of manufacturing reading

London stocks were just a touch higher in early trade on Tuesday as investors mulled news of Israel’s invasion of Southern Lebanon, and eyed the latest reading on the UK manufacturing sector.

At 0900 BST, the FTSE 100 was up 0.1% at 8,248.75.

Kathleeen Brooks, research director at XTB, said: "Pinch and a punch, first day of the month. After a strong Q3 performance for global shares, European stocks are taking a breather on the first trading day of Q4. The Eurostoxx index is down slightly, while the FTSE 100 is slightly higher. US futures are pointing to a mildly lower open later today.

"The main drivers of markets on Tuesday include comments from the chair of the Federal Reserve, Jerome Powell, and news that Israel has started ground operations in Lebanon.

"The market has not reacted to the latest escalation in tensions between Israel and Hezbollah. This was a well signalled next step, and it has not come as a shock to investors. The oil price is down a touch on Tuesday and Brent crude is trading around $71.30. The gold price is higher on this news and is higher by more than $10 per ounce this morning.

"We continue to think that fears about tensions in the Middle East will mostly play out in the gold market, with a limited impact elsewhere.

"So far, Iran has not retaliated and, as yet this conflict has not become a wider issue across the Middle East. This is why markets have remained mostly immune to the situation. Added to this, oil supply from outside of the US, along with expectations that oil demand will decline in the coming years, is also keeping a lid on oil prices. However, if Iran does retaliate or suggest that it will directly strike back at Israel, we expect the oil price to surge and this could rattle global markets."

On home shores, the British Retail Consortium-NielsenIQ Shop Price Index showed that prices continued to move into deflation in September, with a year-on-year decline of 0.6%.

That marked a further fall from the 0.3% deflation recorded in August, and was below the three-month average of -0.3%.

The latest figures indicated the sharpest drop in shop prices since August 2021.

Still to come, the S&P Global manufacturing PMI for September is due at 0930 BST.

In equity markets, WPP was the top gainer on the FTSE 100 after consumer goods giant Unilever concluded its global media review and appointed the ad agency’s media services business, Mindshare, in key markets.

Bakery chain Greggs was in the red as it reported a slowdown in sales for the third quarter.

Luxury handbag maker Mulberry fell as it rejected an £83m takeover offer from Mike Ashley’s Frasers Group, saying it failed to recognise the company’s "substantial future potential value".

Market Movers

FTSE 100 (UKX) 8,248.75 0.14%
FTSE 250 (MCX) 21,035.29 -0.09%
techMARK (TASX) 4,829.08 -0.11%

FTSE 100 - Risers

WPP (WPP) 778.60p 2.02%
Melrose Industries (MRO) 461.60p 1.29%
Fresnillo (FRES) 618.50p 1.14%
Flutter Entertainment (DI) (FLTR) 17,755.00p 1.02%
Relx plc (REL) 3,543.00p 0.97%
London Stock Exchange Group (LSEG) 10,315.00p 0.93%
CRH (CDI) (CRH) 6,880.00p 0.91%
Severn Trent (SVT) 2,666.00p 0.91%
Diageo (DGE) 2,625.50p 0.86%
Vistry Group (VTY) 1,317.00p 0.84%

FTSE 100 - Fallers

Antofagasta (ANTO) 1,981.50p -1.56%
BT Group (BT.A) 145.90p -1.35%
GSK (GSK) 1,497.50p -1.25%
Haleon (HLN) 389.00p -0.99%
Prudential (PRU) 688.20p -0.92%
3i Group (III) 3,276.00p -0.88%
Smurfit Westrock (DI) (SWR) 3,709.00p -0.78%
BP (BP.) 388.70p -0.77%
Beazley (BEZ) 755.50p -0.72%
Reckitt Benckiser Group (RKT) 4,547.00p -0.66%

FTSE 250 - Risers

Target Healthcare Reit Ltd (THRL) 93.00p 3.33%
Me Group International (MEGP) 199.00p 2.37%
Grafton Group Ut (CDI) (GFTU) 1,065.00p 2.33%
Carnival (CCL) 1,245.00p 2.22%
Keller Group (KLR) 1,650.00p 2.10%
PZ Cussons (PZC) 98.00p 1.66%
Cranswick (CWK) 5,080.00p 1.20%
RS Group (RS1) 818.00p 0.99%
Hochschild Mining (HOC) 185.40p 0.98%
Balanced Commercial Property Trust Limited (BCPT) 96.10p 0.95%

FTSE 250 - Fallers

Greggs (GRG) 2,990.00p -4.29%
Morgan Advanced Materials (MGAM) 270.50p -2.17%
Watches of Switzerland Group (WOSG) 467.00p -2.10%
Raspberry PI Holdings (RPI) 379.40p -1.86%
Burberry Group (BRBY) 688.00p -1.85%
BlackRock World Mining Trust (BRWM) 541.00p -1.64%
Wetherspoon (J.D.) (JDW) 731.00p -1.42%
Close Brothers Group (CBG) 405.80p -1.41%
International Public Partnerships Ltd. (INPP) 126.60p -1.40%
Crest Nicholson Holdings (CRST) 190.30p -1.40%