London open: Stocks rise as miners rally; shop price inflation eases
London stocks rose in early trade on Tuesday, with miners pacing the gains after Chinese Premier Li Qiang said the country was still on track to reach its annual growth target of around 5%.
At 0825 BST, the FTSE 100 was up 0.5% at 7,489.42.
Sentiment in Asia was boosted after Li said growth in the second quarter was expected to be faster than in the first.
Richard Hunter, head of markets at Interactive Investor, said: "The comments from China gave an early boost to a premier index in the UK which had given up any gains in the year to date prior to today’s open.
"Wilting sentiment given the twin concerns of Chinese and US economic prospects had weighed on an index with heavy exposure to both, while the outperformance of tech stocks across the pond may well have drawn some investment back to the US with growth in mind.
"The initial bounce in early exchanges was driven by renewed interest in mining stocks, with some read across to the likes of Prudential which could also benefit from any further recovery in China as implied by the Premier’s comments."
On home shores, figures released earlier by the British Retail Consortium and NielsenIQ showed that shop price inflation nudged down to 8.4% in June from 9.0% in May.
Food inflation eased to 14.6% from 15.4%, coming in below the three-month average of 15.2% and marking the second consecutive deceleration in the food category.
Fresh food inflation also slowed further in June, to 15.7% from 17.2%. Ambient food inflation eased to 13.0% from 13.1%, and non-food inflation ticked down to 5.4% from 5.8%.
BRC chief executive Helen Dickinson said: "Households up and down the country will welcome the easing of shop price inflation in June. Food inflation slowed for the second consecutive month, particularly for fresh products, as retailers cut the price of many staples including milk, cheese and eggs. Clothing and electrical goods also saw falling prices, helping customers to pick up a bargain ahead of the summer holidays.
"If the current situation continues, food inflation should drop to single digits later this year. However, it is imperative that government does not hamper this progress by introducing costly new policies."
In equity markets, heavily-weighted miners were the standout gainers, with Antofagasta, Anglo, Glencore, and Rio Tinto all up.
Carnival cruised higher, having tanked on Monday after results, while Centamin shone after it announced a positive pre-feasibility study at its Doropo gold project.
Sportswear retailer JD Sports Fashion slid as it maintained annual guidance despite a slowing of sales growth in May and softening in the US market.
PZ Cussons also fell sharply after the Imperial Leather maker said it expected to take a hit from the recent devaluation of the Nigerian naira, but would report higher annual sales and profits.
BT Group was knocked lower by a downgrade to ‘sell’ at UBS.
Market Movers
FTSE 100 (UKX) 7,489.42 0.48%
FTSE 250 (MCX) 18,063.27 0.49%
techMARK (TASX) 4,452.13 0.12%
FTSE 100 - Risers
Antofagasta (ANTO) 1,512.50p 2.82%
Anglo American (AAL) 2,327.50p 2.31%
Glencore (GLEN) 447.45p 2.30%
Informa (INF) 716.00p 2.23%
Rio Tinto (RIO) 5,101.00p 1.76%
Prudential (PRU) 1,094.50p 1.67%
Beazley (BEZ) 580.50p 1.49%
B&M European Value Retail S.A. (DI) (BME) 585.00p 1.39%
Legal & General Group (LGEN) 228.00p 1.38%
Endeavour Mining (EDV) 1,897.00p 1.34%
FTSE 100 - Fallers
BT Group (BT.A) 123.95p -2.90%
London Stock Exchange Group (LSEG) 8,358.00p -0.67%
Pershing Square Holdings Ltd NPV (PSH) 2,688.00p -0.67%
Halma (HLMA) 2,243.00p -0.53%
Persimmon (PSN) 1,058.00p -0.38%
Haleon (HLN) 320.45p -0.23%
Smith & Nephew (SN.) 1,236.50p -0.20%
Experian (EXPN) 2,903.00p -0.17%
Rentokil Initial (RTO) 619.40p -0.16%
Scottish Mortgage Inv Trust (SMT) 636.60p -0.16%
FTSE 250 - Risers
Carnival (CCL) 1,037.50p 6.43%
NCC Group (NCC) 96.80p 5.22%
Edinburgh Worldwide Inv Trust (EWI) 143.00p 4.38%
Centamin (DI) (CEY) 94.40p 3.96%
Diversified Energy Company (DEC) 86.50p 3.35%
Pennon Group (PNN) 746.50p 2.82%
Direct Line Insurance Group (DLG) 151.10p 2.65%
IntegraFin Holding (IHP) 244.20p 2.61%
Tritax Eurobox (GBP) (EBOX) 52.10p 2.56%
Capita (CPI) 28.60p 2.44%
FTSE 250 - Fallers
PZ Cussons (PZC) 166.00p -5.14%
Sirius Real Estate Ltd. (SRE) 83.30p -1.36%
CMC Markets (CMCX) 149.40p -0.80%
Telecom Plus (TEP) 1,498.00p -0.79%
Mitchells & Butlers (MAB) 202.00p -0.79%
Darktrace (DARK) 321.30p -0.71%
Bytes Technology Group (BYIT) 507.00p -0.69%
Ruffer Investment Company Ltd Red PTG Pref Shares (RICA) 277.00p -0.54%
Polar Capital Technology Trust (PCT) 2,145.00p -0.46%
Finsbury Growth & Income Trust (FGT) 861.00p -0.46%