London open: Stocks rise after late Wall Street rally

London stocks rose in early trade on Tuesday following a late rally on Wall Street, as traders returned to their desks after the long weekend.

At 0835 BST, the FTSE 100 was 1.2% firmer at 7,321.53. Markets were closed on Monday for the funeral of Queen Elizabeth II.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: "The FTSE 100 has opened higher, taking a lead from the close on Wall Street, and cheered by the lifting of a chunk of Covid restrictions in China. But investors are largely expected to be biding their time, waiting for a flurry of central bank activity later in the week, with large rate hikes expected on both sides of the Atlantic. On Wall Street stocks fluctuated in value, drifting higher at the close, amid an absence of a new raft of data to grab onto. But expectations are firming up, that given strong jobs reading and stubborn inflation, another 0.75% rate rise will wash up on shore on Wednesday, the third such hike in a row.

"In the UK, the focus will switch back to speculation over whether the new Truss government is heading for a collision course with the Bank of England with a slash and spend approach to buoy up the economy, at a time when central bank policymakers are trying to suppress demand to try and sink inflation. The Bank of England is expected to decide on another 0.5% rate hike when policymakers meet later this week, but speculation is growing that they could plump for a 0.75% hike given inflation looks set to head back up to double digits."

In equity markets, holiday giant TUI gained as it said winter bookings were at 78% of pre-Covid pandemic levels, and that it still expects to swing to a profit this year.

British Airways and Iberia parent IAG and budget airlines Wizz and easyJet all flew higher.

Consumer healthcare company Haleon gained as it said operating profits grew more than 20% in the six months ended 30 June, driven by increased revenues and margins.

SSE was boosted by an upgrade to ‘overweight’ from ‘neutral’ at JPMorgan.

On the downside, Schroders tumbled as a five for one split was applied to the share price.

B&Q owner Kingfisher was in the red as it reported a fall in first-half profits against a tough comparator last year when DIY boomed during pandemic lockdowns, and said it was facing a "more uncertain macroeconomic environment".

Media group Future tanked following a Sky News report that chief executive Zillah Byng-Thorne has informed the company's chairman that she plans to retire in the next 18 months.

Online greeting card and gift retailer Moonpig also fell sharply even as it backed its full-year guidance and said overall trading since 1 May has been in line with its expectations.

Market Movers

FTSE 100 (UKX) 7,321.53 1.17%
FTSE 250 (MCX) 18,832.76 0.19%
techMARK (TASX) 4,244.53 0.52%

FTSE 100 - Risers

International Consolidated Airlines Group SA (CDI) (IAG) 108.96p 2.81%
Prudential (PRU) 982.40p 2.59%
Diageo (DGE) 3,838.50p 2.50%
BP (BP.) 462.80p 2.38%
Shell (SHEL) 2,350.50p 2.35%
Burberry Group (BRBY) 1,764.50p 2.35%
Standard Chartered (STAN) 615.20p 2.16%
Rolls-Royce Holdings (RR.) 77.37p 2.11%
HSBC Holdings (HSBA) 540.20p 2.00%
British American Tobacco (BATS) 3,516.50p 1.91%

FTSE 100 - Fallers

Schroders (SDR) 437.10p -13.20%
Admiral Group (ADM) 2,215.00p -2.51%
Ocado Group (OCDO) 654.20p -2.50%
Unite Group (UTG) 976.00p -2.50%
Convatec Group (CTEC) 220.00p -1.70%
SEGRO (SGRO) 869.60p -1.56%
Berkeley Group Holdings (The) (BKG) 3,561.00p -0.95%
Ashtead Group (AHT) 4,223.00p -0.92%
Land Securities Group (LAND) 607.00p -0.91%
Persimmon (PSN) 1,418.00p -0.84%

FTSE 250 - Risers

Morgan Sindall Group (MGNS) 1,690.00p 3.94%
Wizz Air Holdings (WIZZ) 2,053.00p 3.50%
easyJet (EZJ) 357.40p 3.29%
TUI AG Reg Shs (DI) (TUI) 141.30p 3.18%
W.A.G Payment Solutions (WPS) 96.70p 2.87%
TBC Bank Group (TBCG) 1,782.00p 2.77%
Morgan Advanced Materials (MGAM) 250.50p 2.45%
Drax Group (DRX) 706.50p 2.32%
888 Holdings (DI) (888) 120.70p 2.29%
Darktrace (DARK) 361.20p 2.12%

FTSE 250 - Fallers

Future (FUTR) 1,427.00p -13.88%
Aston Martin Lagonda Global Holdings (AML) 168.10p -5.64%
Moonpig Group (MOON) 190.00p -5.00%
Premier Foods (PFD) 100.00p -3.66%
Countryside Partnerships (CSP) 246.40p -3.52%
Sirius Real Estate Ltd. (SRE) 79.70p -2.92%
Ferrexpo (FXPO) 147.60p -2.64%
Polymetal International (POLY) 224.20p -2.52%
Ascential (ASCL) 218.40p -2.33%
LondonMetric Property (LMP) 204.00p -2.11%