London open: Stocks rally as investors eye Fed announcement

London stocks rose in early trade on Wednesday as worries about China's Evergrande eased, with all eyes on the latest policy announcement from the US Federal Reserve.

At 0845 BST, the FTSE 100 was up 1% at 7,053.60.

Richard Hunter, head of markets at Interactive Investor, said: "The Fed is expected to reiterate its stance on a tapering of its bond buying programme, with the consensus still believing that December will most likely signal the firing of the starting gun.

"However, with weaker employment numbers of late and the jobs market still almost six million shy of pre-pandemic levels, one of the Fed’s key requirements has not yet been met. At the same time, a combination of supply chain issues and spikes in the Delta variant have tapped the brakes on the economic recovery, prompting downgrades of the outlook for this year. The additional complication of elevated inflation adds to the mix and, in this brittle environment, the comments will receive extra scrutiny.

"Default fears over the Chinese property developer Evergrande have added to the general list of concerns, although there was some relief following the company’s promise to pay its bond interest due on Thursday. Nonetheless, until the issue is clarified, fears of contagion will continue to unsettle investors."

In equity markets, Ladbrokes owner Entain racked up healthy gains after saying that DraftKings had made a £16.4bn takeover offer for the sports betting company.

US-based DraftKings made an initial approach at 2,500p a share which was rejected. The group subsequently upped its offer to 2,800p a share, consisting of 630p in cash and the balance in stock. The latest offer represents a 46.2% premium to Entain's closing share price on Monday.

888 Holdings was the standout gainer on the FTSE 100, with traders pointing to positive readacross from the Entain news.

Flutter Entertainment advanced after the Paddy Power Betfair owner said it had settled in full a legal dispute with the Commonwealth of Kentucky.

Covid-19 vaccine producer Oxford Biomedica pushed higher after saying it swung to a profit in the half year on the back of a surge in revenues.

In terms of sectors, miners put in a strong performance as copper prices rallied, with Anglo American, Antofagasta, BHP, Glencore and Rio all higher.

On the downside, Imperial Leather maker PZ Cussons slumped after it posted higher full-year profits as sales of hygiene products soared, but said first-quarter sales had fallen against tough comparators during the height of the Covid pandemic.

Market Movers

FTSE 100 (UKX) 7,053.60 1.04%
FTSE 250 (MCX) 23,733.17 0.52%
techMARK (TASX) 4,748.67 0.57%

FTSE 100 - Risers

Entain (ENT) 2,442.00p 8.01%
Flutter Entertainment (CDI) (FLTR) 16,090.00p 5.37%
Anglo American (AAL) 2,550.50p 3.09%
BHP Group (BHP) 1,906.40p 2.95%
Antofagasta (ANTO) 1,368.00p 2.93%
Prudential (PRU) 1,402.50p 2.86%
Glencore (GLEN) 320.85p 2.84%
Evraz (EVR) 575.40p 2.31%
Rio Tinto (RIO) 4,809.50p 2.18%
Legal & General Group (LGEN) 277.40p 2.17%

FTSE 100 - Fallers

AstraZeneca (AZN) 8,658.00p -0.60%
Severn Trent (SVT) 2,802.00p -0.53%
Hikma Pharmaceuticals (HIK) 2,379.00p -0.50%
Royal Mail (RMG) 479.80p -0.46%
GlaxoSmithKline (GSK) 1,414.00p -0.35%
Ocado Group (OCDO) 1,713.50p -0.32%
London Stock Exchange Group (LSEG) 7,964.00p -0.13%
Avast (AVST) 571.40p -0.10%
National Grid (NG.) 956.80p -0.09%
Morrison (Wm) Supermarkets (MRW) 292.90p -0.03%

FTSE 250 - Risers

888 Holdings (888) 477.60p 6.61%
Oxford Biomedica (OXB) 1,566.00p 5.95%
Wood Group (John) (WG.) 210.50p 2.43%
Harbour Energy (HBR) 370.40p 2.26%
Investec (INVP) 284.20p 2.23%
Playtech (PTEC) 442.60p 2.08%
Weir Group (WEIR) 1,694.50p 1.96%
Centrica (CNA) 55.00p 1.93%
Drax Group (DRX) 512.00p 1.79%
Diversified Energy Company (DEC) 115.00p 1.77%

FTSE 250 - Fallers

PZ Cussons (PZC) 212.00p -8.03%
XP Power Ltd. (DI) (XPP) 5,210.00p -3.52%
PureTech Health (PRTC) 358.50p -2.05%
Restaurant Group (RTN) 110.60p -1.95%
Bytes Technology Group (BYIT) 517.50p -1.62%
JPMorgan European Discovery Trust (JEDT) 536.00p -1.47%
Edinburgh Worldwide Inv Trust (EWI) 319.50p -1.39%
CMC Markets (CMCX) 269.50p -1.28%
Trustpilot Group (TRST) 362.40p -1.20%
Bridgepoint Group (Reg S) (BPT) 563.00p -1.05%