London open: Stocks rally as investors eye Fed announcement

London stocks rose in early trade on Wednesday, taking their cue from an upbeat finish on Wall Street as investors eyed the latest policy announcement from the US Federal Reserve.

At 0840 GMT, the FTSE 100 was up 1.4% at 7,276.25.

Sentiment got a lift after China’s government pledged support for financial markets and amid signs of progress in Russia-Ukraine peace talks. Ukrainian president Volodymyr Zelensky confirmed in a late-night address on Wednesday that meetings between officials from both sides were ongoing, adding that "the positions at negotiations are more realistic now".

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: "There are signs of optimism coming through on financial markets today with the FTSE 100 opening up 1.2% in early trade amid fresh signs a negotiated deal to end the conflict in Ukraine may be a step closer.

"This comes hot on the heels of a rally in Asia and the US, where there are genuine hopes inflation may have peaked.

"All eyes are firmly focussed on the Federal Reserve meeting later today - the first in four years, where an interest rate hike is expected. Should this fail to materialise, further volatility across European and the UK market should be expected. It’s also worth keeping in mind the Russian invasion of Ukraine means the frequency and extent of rate rises may not be as high as previously predicted.

"Of course, oil prices are still very much front and centre of the financial - and consumer - worlds’ minds. Prices rose for the first time in three days on Wednesday, with Brent crude reaching $102 a barrel. But exactly where they’re going to land long-term is very much determined by demand. With fresh, albeit tentative, hope of constructive talks between Ukraine and Russia swirling, there is scope for some further heat to come out the oil price. However, it’s more likely that continued volatility is coming down the pipes."

In UK equity markets, Computacenter gained as it hiked its full-year dividend after saying it had delivered double-digit revenue and profit growth in 2021.

Software and cloud services specialist Bytes Technology advanced after it hailed "another upbeat year" and said results were ahead of expectations.

Elsewhere, Close Brothers was boosted by an upgrade to ‘buy’ at Shore Capital.

On the downside, cybersecurity software firm Avast tumbled after the UK’s Competition and Markets Authority said its acquisition by US rival NortonLifeLock raises competition concerns and that the deal could be referred for an in-depth probe if the concerns are not addressed.

Gold miner Centamin lost its shine as its full-year profits fell short of expectations.

Market Movers

FTSE 100 (UKX) 7,276.25 1.40%
FTSE 250 (MCX) 20,643.50 1.90%
techMARK (TASX) 4,274.94 1.34%

FTSE 100 - Risers

Scottish Mortgage Inv Trust (SMT) 929.80p 5.80%
Burberry Group (BRBY) 1,668.50p 4.84%
Prudential (PRU) 1,042.50p 4.25%
Melrose Industries (MRO) 130.80p 3.93%
Flutter Entertainment (CDI) (FLTR) 9,170.00p 3.83%
Intermediate Capital Group (ICP) 1,654.00p 3.76%
InterContinental Hotels Group (IHG) 5,156.00p 3.72%
WPP (WPP) 1,043.50p 3.62%
Smurfit Kappa Group (CDI) (SKG) 3,373.00p 3.56%
3i Group (III) 1,315.50p 3.50%

FTSE 100 - Fallers

Avast (AVST) 589.00p -8.74%
BAE Systems (BA.) 715.20p -2.35%
United Utilities Group (UU.) 1,074.50p -0.83%
Imperial Brands (IMB) 1,549.50p -0.55%
Shell (SHEL) 1,929.60p -0.54%
Pearson (PSON) 823.60p -0.39%
BP (BP.) 360.00p -0.28%
British American Tobacco (BATS) 3,078.00p -0.28%
Severn Trent (SVT) 2,911.00p -0.24%
Fresnillo (FRES) 699.40p -0.17%

FTSE 250 - Risers

Fidelity China Special Situations (FCSS) 239.00p 9.38%
Petropavlovsk (POG) 2.37p 7.73%
TP Icap Group (TCAP) 118.60p 6.85%
Aston Martin Lagonda Global Holdings (AML) 904.60p 6.40%
Bytes Technology Group (BYIT) 448.80p 6.20%
Baillie Gifford US Growth Trust (USA) 210.50p 6.10%
Edinburgh Worldwide Inv Trust (EWI) 209.00p 5.98%
PureTech Health (PRTC) 209.50p 5.92%
Watches of Switzerland Group (WOSG) 1,098.00p 5.78%
Allianz Technology Trust (ATT) 262.00p 5.65%

FTSE 250 - Fallers

Centamin (DI) (CEY) 92.58p -5.68%
Ferrexpo (FXPO) 143.80p -2.90%
IG Group Holdings (IGG) 761.50p -2.75%
Hilton Food Group (HFG) 1,062.00p -0.93%
Contour Global (GLO) 186.60p -0.53%
QinetiQ Group (QQ.) 305.60p -0.52%
Centrica (CNA) 78.04p -0.48%
Plus500 Ltd (DI) (PLUS) 1,390.00p -0.32%
Vietnam Enterprise Investments (DI) (VEIL) 715.00p -0.28%
Endeavour Mining (EDV) 1,905.00p -0.26%