London open: Stocks rise after EU leaders agree rescue package

London stocks rose in early trade on Tuesday after EU leaders finally agreed on a Covid-19 rescue package.

At 0900 BST, the FTSE 100 was up 0.4% at 6,287.59.

Spreadex analyst Connor Campbell said: "It took them all weekend, but the European Union member states have come out the other side of the latest Brussels summit holding aloft a shiny €750 billion covid-19 rescue-package.

"The deal isn’t without its compromises. Though Macron and Merkel were initial seeking a €500 billion grant programme for the EU’s worst hit - largely Southern - members, stiff opposition from the ‘frugal’, mainly Northern, fivesome of Austria, Denmark, Sweden, Finland and the Netherlands saw that number reduced to €390 billion.

"Still, given how rocky things were looking at points over the weekend, it’s a relief the package got over the line."

On home shores, investors were mulling the latest figures from the Office for National Statistics, which showed the UK government borrowed £35.5bn in June, around five times more than last June and taking total government debt to a record £1.98trn. Still, it was lower than May’s £45.5bn and below consensus expectations of £38bn.

Capital Economics said: "The smaller rise in public sector borrowing in June compared to May suggests that government support is starting to wind down as the economy reopens.

"However, government borrowing is still exceptionally high and we suspect that a slowdown in the recovery and further rise in unemployment later this year will prompt the government to announce additional fiscal spending at the next Budget."

In equity markets, British Airways and Iberia parent IAG was a high riser following heavy losses in the previous session.

Trainline shares surged after the company said it had appointed Photobox chief executive Jody Ford to the newly-created role of chief operating officer, with effect from 21 September.

Outside the FTSE 350, fashion retailer Ted Baker rallied as it posted a 55% slump in revenue for the 11 weeks to 18 July but said this was ahead of the base case scenario outlined in the preliminary results last month.

On the downside, miner BHP Group was in the red as it reported a 7% rise in fourth-quarter iron ore output, but warned the resurgence of coronavirus outbreaks threatened the short-term demand outlook for its main commodities.

GVC Holdings was sharply lower after the gambling firm said British tax authorities were now investigating an unidentified part of the group after widening a probe into payment processing for online betting in Turkey. The company said the Revenue & Customs (HMRC) department had on Monday informed it that it was examining "potential corporate offending".

Capital & Counties was weaker after it said the value of its Covent Garden estate had fallen by 17% as the coronavirus pandemic took its toll on the company’s tenants, many of whom were forced to close their doors in March.

Market Movers

FTSE 100 (UKX) 6,287.59 0.42%
FTSE 250 (MCX) 17,512.94 0.73%
techMARK (TASX) 3,860.18 0.04%

FTSE 100 - Risers

International Consolidated Airlines Group SA (CDI) (IAG) 221.10p 4.79%
Scottish Mortgage Inv Trust (SMT) 942.00p 2.95%
Melrose Industries (MRO) 119.70p 2.53%
Rolls-Royce Holdings (RR.) 271.00p 2.34%
Sage Group (SGE) 706.20p 2.32%
Whitbread (WTB) 2,329.00p 2.15%
JD Sports Fashion (JD.) 650.00p 2.10%
Royal Bank of Scotland Group (RBS) 121.85p 2.01%
HSBC Holdings (HSBA) 381.65p 1.96%
Fresnillo (FRES) 1,117.50p 1.87%

FTSE 100 - Fallers

GVC Holdings (GVC) 788.00p -9.63%
Flutter Entertainment (FLTR) 11,295.00p -1.65%
Persimmon (PSN) 2,575.00p -1.49%
Homeserve (HSV) 1,331.00p -1.33%
BHP Group (BHP) 1,775.40p -1.26%
Berkeley Group Holdings (The) (BKG) 4,433.00p -1.23%
Barratt Developments (BDEV) 541.00p -1.17%
Rentokil Initial (RTO) 548.00p -1.15%
Avast (AVST) 590.50p -1.01%
Admiral Group (ADM) 2,353.00p -0.88%

FTSE 250 - Risers

Trainline (TRN) 424.40p 6.26%
Hays (HAS) 128.60p 5.67%
Virgin Money UK (VMUK) 98.98p 5.37%
Babcock International Group (BAB) 298.60p 4.66%
Frasers Group (FRAS) 296.20p 4.30%
Hammerson (HMSO) 78.32p 4.07%
Greencore Group (GNC) 119.30p 3.74%
TUI AG Reg Shs (DI) (TUI) 362.40p 3.51%
TI Fluid Systems (TIFS) 189.60p 3.49%
Provident Financial (PFG) 171.70p 3.43%

FTSE 250 - Fallers

Contour Global (GLO) 202.00p -4.04%
Spirent Communications (SPT) 260.50p -3.87%
Just Group (JUST) 45.72p -3.34%
Vivo Energy (VVO) 75.10p -3.22%
TalkTalk Telecom Group (TALK) 77.25p -2.83%
ICG Enterprise Trust (ICGT) 740.00p -2.12%
Capital & Counties Properties (CAPC) 141.10p -2.01%
Rank Group (RNK) 145.20p -1.89%
4Imprint Group (FOUR) 2,280.00p -1.72%
Diploma (DPLM) 1,840.00p -1.60%