London open: Stocks rise; BoE said to delay quantitative tightening

London stocks rose in early trade on Tuesday, taking their cue from positive US and Asian sessions, with the mood still upbeat after new chancellor Jeremy Hunt tore up his predecessor’s mini-budget.

At 0835 BST, the FTSE 100 was up 0.8% at 6,974.81, while sterling was 0.2% lower versus the dollar at 1.1332, following a report that the Bank of England will delay quantitative tightening.

According to the Financial Times, the BoE will push back the sale of billions of pounds of government bonds until markets are calmer. The FT said bank officials had made the decision after assessing markets as being "very distressed".

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: "’The new sense of calm emanating from the UK has helped spread ripples of optimism across global markets, helped by a jolt of earnings cheer. A sea of green is lapping over indices, as concerns about contagion from a bond market meltdown abate.

"Bank of America’s upbeat assessment of the US economy as it posted a robust set of numbers was also a reassuring marker for investors. American consumers are still showing resilience in their spending habits, which is being taken as an indication that either a recession is less likely or will be shallower than has been feared. As interest rates tramp upwards, they are providing a boost to net income margins and helping offset weakness in the Bank’s investment division.

"Newly parachuted in UK finance minister, Chancellor Jeremy Hunt has succeeded in appeasing bond market vigilantes for now. UK government borrowing costs are hovering near yesterday’s low with 10 year gilt yields still below 4%. But the hard won truce could fall apart in the weeks to come, if his spending plans don’t deliver the detail investors crave for economic policy uncertainty to abate.

"This is likely to be why the Bank of England is reported to be further delaying the sale of billions of pounds of government bonds which it was originally due to offload earlier this month. It’s clear the bank is still unnerved by the potential for fresh instability in gilt markets given that so much uncertainty still remains about the government’s fiscal plans."

In equity markets, advertising giant WPP racked up solid gains as French peer Publicis lifted its 2022 guidance after a better-than-expected third-quarter performance.

Clay bricks manufacturer Ibstock rallied as it said third-quarter trading was ahead of its expectations, with "robust" demand patterns and a strong operational performance.

Price comparison website Moneysupermarket pushed higher after saying annual core earnings would be at the upper end of expectations as third-quarter trading came in ahead of expectations, driven by customers switching financial products.

On the downside, Rio Tinto slipped after the miner trimmed its full-year production guidance, as the weakening global economic outlook weighed on the third quarter.

Housebuilder Bellway was in the red as it reported a jump in full-year profit amid record revenues and completions, but warned that demand was moderating.

888 Holdings fell after it said group revenues declined 7% year-on-year to £449.0m in the three months ended 30 September, mainly due to enhanced UK online player safety measures and the shuttering of its Dutch operations.

Market Movers

FTSE 100 (UKX) 6,974.81 0.79%
FTSE 250 (MCX) 17,638.27 0.77%
techMARK (TASX) 4,171.87 0.92%

FTSE 100 - Risers

Smurfit Kappa Group (CDI) (SKG) 2,756.00p 3.03%
WPP (WPP) 775.00p 2.81%
Dechra Pharmaceuticals (DPH) 2,766.00p 2.60%
Hargreaves Lansdown (HL.) 815.40p 2.36%
Ashtead Group (AHT) 4,367.00p 2.30%
Prudential (PRU) 903.60p 2.22%
St James's Place (STJ) 1,010.50p 2.09%
Spirax-Sarco Engineering (SPX) 10,785.00p 2.08%
Halma (HLMA) 2,069.00p 2.02%
Scottish Mortgage Inv Trust (SMT) 746.80p 1.88%

FTSE 100 - Fallers

Centrica (CNA) 71.20p -1.52%
Imperial Brands (IMB) 1,977.00p -1.49%
Rio Tinto (RIO) 4,766.50p -1.11%
Barratt Developments (BDEV) 357.40p -0.72%
Taylor Wimpey (TW.) 90.76p -0.57%
Tesco (TSCO) 204.80p -0.44%
British Land Company (BLND) 349.80p -0.29%
Endeavour Mining (EDV) 1,493.00p -0.27%
SEGRO (SGRO) 765.20p -0.23%
Aveva Group (AVV) 3,139.00p -0.22%

FTSE 250 - Risers

Ibstock (IBST) 159.90p 5.41%
Moneysupermarket.com Group (MONY) 207.00p 4.23%
Moonpig Group (MOON) 135.00p 3.05%
Allianz Technology Trust (ATT) 225.00p 2.97%
Watches of Switzerland Group (WOSG) 809.50p 2.73%
Monks Inv Trust (MNKS) 973.00p 2.53%
Smithson Investment Trust (SSON) 1,215.00p 2.45%
Baltic Classifieds Group (BCG) 151.60p 2.43%
Essentra (ESNT) 212.00p 2.42%
PureTech Health (PRTC) 234.50p 2.40%

FTSE 250 - Fallers

888 Holdings (DI) (888) 87.00p -3.55%
Ninety One (N91) 180.00p -3.54%
Darktrace (DARK) 335.80p -2.21%
Vistry Group (VTY) 554.50p -1.95%
VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 440.50p -1.78%
Redrow (RDW) 409.40p -1.68%
Syncona Limited NPV (SYNC) 177.00p -1.56%
Network International Holdings (NETW) 311.00p -0.96%
Drax Group (DRX) 524.00p -0.95%
Target Healthcare Reit Ltd (THRL) 84.20p -0.82%