London open: Stocks rally on China optimism; Bunzl boosts guidance

London stocks shot higher in early trade on Tuesday following a positive Asian session, as traders returned to their desks after the long weekend.

At 0915 BST, the FTSE 100 was up 1.2% at 7,424.44.

Asian markets rallied for a second day in a row, after China unveiled strategic measures to boost its stock markets, such as a cut in stamp duty and the loosening of margin loan rules.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "Fresh evidence that inflation is going in the right direction and fresh stimulus for industries in China have given the FTSE 100 a big spring in its step in early trade.

"Commodity giants have jumped higher as metals prices have risen after Beijing introduced support for transport, property and infrastructure projects. For now this extra help has boosted sentiment but underlying questions still remain over the fragility of China’s economy."

On home shores, investors were digesting the latest data from the British Retail Consortium/NielsenIQ, which showed that annual shop price inflation eased to 6.9% in August from 7.6% in July. Meanwhile, food inflation fell to 11.5% from 13.4%.

BRC chief executive Helen Dickinson said: "Better news for consumers as shop price inflation in August eased to its lowest level since October 2022. This was driven by falling food inflation, particularly for products such as meat, potatoes and some cooking oils. These figures would have been lower still had the Government not increased alcohol duties earlier this month."

In equity markets, distribution specialist Bunzl rose sharply after it upgraded guidance for annual adjusted operating profits as it reported a rise in half-year earnings.

"We now expect adjusted operating profit to be moderately higher than in 2022 at constant exchange rates, with operating margin remaining strong and moderately higher than that achieved in the prior year," it said.

Drinks company Britvic was boosted by an upgrade to ‘overweight’ at Barclays.

The bank said: "In the wake of Covid and inflation disruption to the implementation of Britvic's new growth strategy, we now see headwinds clearing and identify multiple top-line and margin drivers that can deliver accelerated growth."

Market Movers

FTSE 100 (UKX) 7,424.44 1.17%
FTSE 250 (MCX) 18,364.65 1.29%
techMARK (TASX) 4,275.43 1.09%

FTSE 100 - Risers

Bunzl (BNZL) 2,822.00p 3.60%
Prudential (PRU) 977.80p 3.27%
Ocado Group (OCDO) 765.40p 3.18%
Persimmon (PSN) 1,016.00p 2.94%
Airtel Africa (AAF) 114.00p 2.80%
Smurfit Kappa Group (CDI) (SKG) 3,232.00p 2.67%
Smith (DS) (SMDS) 300.30p 2.42%
Phoenix Group Holdings (PHNX) 517.20p 2.38%
Legal & General Group (LGEN) 217.70p 2.35%
Johnson Matthey (JMAT) 1,579.00p 2.33%

FTSE 100 - Fallers

B&M European Value Retail S.A. (DI) (BME) 564.20p -0.53%
Tesco (TSCO) 260.10p 0.00%
Rentokil Initial (RTO) 588.60p 0.20%
Haleon (HLN) 328.50p 0.23%
Melrose Industries (MRO) 510.00p 0.24%
HSBC Holdings (HSBA) 589.30p 0.26%
Admiral Group (ADM) 2,397.00p 0.29%
Sainsbury (J) (SBRY) 262.70p 0.31%
Next (NXT) 6,806.00p 0.38%
Compass Group (CPG) 2,028.00p 0.45%

FTSE 250 - Risers

Synthomer (SYNT) 67.45p 6.14%
Quilter (QLT) 86.30p 5.57%
Mobico Group (MCG) 79.00p 4.77%
PureTech Health (PRTC) 193.60p 4.31%
Bridgepoint Group (Reg S) (BPT) 174.50p 3.75%
Watches of Switzerland Group (WOSG) 569.00p 3.74%
Aston Martin Lagonda Global Holdings (AML) 350.40p 3.67%
Target Healthcare Reit Ltd (THRL) 71.10p 3.34%
Molten Ventures (GROW) 251.00p 3.29%
Future (FUTR) 770.50p 3.28%

FTSE 250 - Fallers

Carnival (CCL) 1,107.00p -1.34%
Games Workshop Group (GAW) 10,510.00p -1.04%
Caledonia Investments (CLDN) 3,355.00p -1.03%
Foresight Solar Fund Limited (FSFL) 91.20p -0.55%
SDCL Energy Efficiency Income Trust (SEIT) 75.40p -0.53%
Capital Gearing Trust (CGT) 4,500.00p -0.33%
The European Smaller Companies Trust (ESCT) 152.00p -0.33%
Murray International Trust (MYI) 239.00p -0.21%
Ithaca Energy (ITH) 144.40p -0.14%
Drax Group (DRX) 559.00p -0.11%