London open: Stocks rise as geopolitical tensions ease; Tesco gains on update
London stocks rose in early trade on Thursday, with investors breathing a sigh of relief as tensions between the US and Iran cooled.
At 0835 GMT, the FTSE 100 was up 0.4% at 7,604.66.
Spreadex analyst Connor Campbell said: "Less than a week after the death of Qassem Suleimani, it seems that both the US and Iran might be stepping away from the escalation threatened in the aftermath of the assassination.
"Following on from the missile attack on US bases in Iraq - an attack that thankfully didn’t cause any casualties - Donald Trump gave a press conference on Wednesday stating ‘Iran appears to be standing down’. More importantly the President’s speech was less full of sabre-rattling than his recent tweets, saying that the fact America has such a sizeable military ‘does not mean we have to use it. We do not want to use it.’
"With all this echoing Iranian foreign minister Javad Zarif’s comments following the missile strike, the markets were able to enter recovery mode."
In equity markets, Tesco was on the front foot after it reported a 0.1% rise in underlying UK Christmas sales in what it described as a "subdued" market. The UK's largest retailer said it had its biggest day of UK food sales in its history on the back of its "best operational performance in six years".
Shares of pub group Mitchells & Butlers fizzed higher after it said like for like sales grew 2.6% in the 14 weeks to January 4 with a strong performance over the Christmas period.
Distribution specialist Bunzl advanced after announcing the acquisition of US firm Joshen Paper & Packaging for an undisclosed sum.
On the downside, building materials group SIG tumbled as it issued a profit warning due to deteriorating construction markets, namely in the UK. Travis Perkins was also in the red, while on the FTSE 100, B&Q owner Kingfisher was the worst performer, with traders pointed to read-across form the SIG warning.
Marks & Spencer was the standout loser on the FTSE 250 after the retailer reported a 0.6% decline in total third-quarter sales to £2.8bn as its clothing and home segment underperformed. In addition, while the company backed its guidance for the year, it said gross margins were expected to be around the lower end of guidance.
In broker note action, Tullow Oil was hit by a downgrade to ‘equalweight’ at Barclays.
Market Movers
FTSE 100 (UKX) 7,604.66 0.39%
FTSE 250 (MCX) 21,725.98 0.34%
techMARK (TASX) 4,201.86 0.40%
FTSE 100 - Risers
NMC Health (NMC) 1,297.50p 3.18%
London Stock Exchange Group (LSE) 7,706.00p 2.17%
Glencore (GLEN) 244.50p 1.96%
Tesco (TSCO) 255.10p 1.63%
easyJet (EZJ) 1,429.50p 1.56%
Carnival (CCL) 3,534.00p 1.44%
Burberry Group (BRBY) 2,203.00p 1.24%
Ashtead Group (AHT) 2,457.00p 1.24%
Sage Group (SGE) 742.80p 1.23%
Coca-Cola HBC AG (CDI) (CCH) 2,650.00p 1.22%
FTSE 100 - Fallers
Kingfisher (KGF) 219.40p -2.05%
Barratt Developments (BDEV) 754.20p -0.92%
Pearson (PSON) 629.60p -0.91%
BP (BP.) 490.85p -0.70%
Persimmon (PSN) 2,705.00p -0.66%
Polymetal International (POLY) 1,195.50p -0.54%
United Utilities Group (UU.) 940.00p -0.51%
Royal Dutch Shell 'B' (RDSB) 2,279.50p -0.48%
Next (NXT) 6,876.00p -0.43%
Lloyds Banking Group (LLOY) 62.56p -0.37%
FTSE 250 - Risers
Mitchells & Butlers (MAB) 442.50p 4.98%
Galliford Try (GFRD) 150.78p 4.65%
Restaurant Group (RTN) 167.30p 3.78%
4Imprint Group (FOUR) 3,350.00p 3.40%
Watches of Switzerland Group (WOSG) 385.80p 2.88%
Serco Group (SRP) 163.10p 2.77%
Investec (INVP) 444.10p 2.56%
Elementis (ELM) 167.20p 2.33%
Stagecoach Group (SGC) 163.60p 2.25%
PZ Cussons (PZC) 207.50p 2.22%
FTSE 250 - Fallers
SIG (SHI) 91.70p -23.07%
Marks & Spencer Group (MKS) 204.00p -6.68%
National Express Group (NEX) 453.40p -2.37%
Morgan Advanced Materials (MGAM) 300.20p -2.34%
Paragon Banking Group (PAG) 514.50p -2.28%
Barr (A.G.) (BAG) 556.00p -1.94%
Travis Perkins (TPK) 1,602.00p -1.78%
WH Smith (SMWH) 2,572.00p -1.76%
Premier Oil (PMO) 107.30p -1.60%
Ferrexpo (FXPO) 153.85p -1.57%