London open: Stocks rise as US banks step in to help First Republic

London stocks rose in early trade on Friday, tracking gains on Wall Street after a group of US banks stepped in to rescue First Republic Bank.

At 0820 GMT, the FTSE 100 was up 0.8% at 7,470.68.

On Thursday, 11 US lenders deposited $30bn with First Republic Bank in a show of support.

The banks involved are Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, Goldman Sachs, Morgan Stanley, BNY Mellon, PNC Bank, State Street, Truist and US Bank.

In a statement, they said: "The actions of America’s largest banks reflect their confidence in the country’s banking system. Together, we are deploying our financial strength and liquidity into the larger system, where it is needed the most.

"Smaller- and medium-sized banks support their local customers and businesses, create millions of jobs and help uplift communities. America’s larger banks stand united with all banks to support our economy and all of those around us."

Richard Hunter, head of markets at Interactive Investor, said: "Investors regained some poise after the tribulations of recent days, boosted by further actions to stem the potential of bank sector contagion.

"In the US, the initial signs were not positive as the main indices swung into the red, with the Dow Jones falling over 300 points, largely in reaction to the European Central Bank’s decision to press ahead with a further interest rate rise of 0.5%. However, sentiment turned after news emerged that a consortium of banks announced that it would be depositing $30 billion with First Republic Bank in an effort to shore up its capital position.

"The sentiment swing came despite reports that US banks had been seeking record amounts of emergency liquidity from the central bank in recent days which, while not alarming of itself, was a sign that the waves of caution had not yet subsided. Even so, the generally swift and decisive actions which have been taken have removed some of the sting from market volatility."

In equity markets, miners were the standout gainers, with Anglo American, Glencore, Antofagasta and Rio Tinto all up as metals prices rose.

Bodycote surged after reporting a jump in full-year profit and revenue and lifting its dividend, as it said permanent price increases had fully recovered labour and general cost inflation.

Frasers Group advanced after the Financial Reporting Council said it had closed its investigation into Grant Thornton's audit of Sports Direct’s financial statements for the year to 24 April 2016.

Diploma was also in the black after it raised around £235m in a placing to help fund the acquisition of US-based Tennessee Industrial Electronics.

BT Group fell after Ofcom said it will need another two months to undertake further analysis of Openreach’s ‘Equinox 2’ discount scheme.

In broker note action, GSK was boosted by an upgrade to ‘buy’ from ‘hold’ at Deutsche Bank, but Sage Group was a little weaker after a downgrade to ‘neutral’ at Exane.

Market Movers

FTSE 100 (UKX) 7,470.68 0.82%
FTSE 250 (MCX) 18,841.44 0.44%
techMARK (TASX) 4,520.59 0.09%

FTSE 100 - Risers

Anglo American (AAL) 2,558.50p 3.21%
Glencore (GLEN) 436.40p 3.12%
Shell (SHEL) 2,271.50p 2.83%
Antofagasta (ANTO) 1,491.00p 2.54%
BP (BP.) 494.50p 2.50%
Rio Tinto (RIO) 5,412.00p 2.48%
London Stock Exchange Group (LSEG) 7,492.00p 2.27%
Pershing Square Holdings Ltd NPV (PSH) 2,830.00p 1.80%
Rightmove (RMV) 558.00p 1.49%
Rolls-Royce Holdings (RR.) 148.40p 1.44%

FTSE 100 - Fallers

BT Group (BT.A) 144.20p -1.67%
Sage Group (SGE) 747.80p -0.72%
Centrica (CNA) 103.10p -0.58%
Severn Trent (SVT) 2,834.00p -0.56%
Reckitt Benckiser Group (RKT) 5,850.00p -0.54%
United Utilities Group (UU.) 1,060.00p -0.47%
SSE (SSE) 1,729.00p -0.35%
National Grid (NG.) 1,054.50p -0.33%
Rentokil Initial (RTO) 551.80p -0.33%
Haleon (HLN) 321.45p -0.31%

FTSE 250 - Risers

Bodycote (BOY) 621.00p 6.79%
Tullow Oil (TLW) 30.18p 4.07%
Wood Group (John) (WG.) 209.50p 3.25%
Wetherspoon (J.D.) (JDW) 600.00p 2.83%
Hunting (HTG) 237.00p 2.60%
Just Group (JUST) 86.30p 2.49%
Ferrexpo (FXPO) 121.60p 2.44%
Energean (ENOG) 1,138.00p 2.43%
National Express Group (NEX) 123.20p 2.41%
Elementis (ELM) 119.20p 2.41%

FTSE 250 - Fallers

TP Icap Group (TCAP) 162.90p -2.40%
Bankers Inv Trust (BNKR) 98.00p -2.20%
Currys (CURY) 63.65p -2.00%
C&C Group (CDI) (CCR) 142.10p -2.00%
TBC Bank Group (TBCG) 2,220.00p -1.55%
Savills (SVS) 956.50p -1.09%
Grafton Group Ut (CDI) (GFTU) 853.40p -1.01%
Target Healthcare Reit Ltd (THRL) 70.10p -0.99%
Bridgepoint Group (Reg S) (BPT) 213.40p -0.93%
Ibstock (IBST) 176.50p -0.84%