London open: Stocks tracking fresh gains on Wall Street

Stocks are tracking the record highs set overnight on the US Dow Jones Industrials and S&P 500, despite news of a partial shutdown of the world's third-largest container port in China.

At 0917 BST, the FTSE 100 was trading up 0.28% to 7,213.35, alongside a 0.1% advance for the FTSE 250 to 23,778.6.

Thursday's gains on Wall Street came despite a stronger-than-expected reading on US producer prices.

But according to Michael Hewson, chief market analyst at CMC Markets UK: "For now, markets appear to be working on the baseline assumption that a taper is coming, and getting comfortable with that idea, and as long as the discussion doesn’t move onto the more sensitive topic of rate rises, then the current trend of higher highs looks set to continue."

In China meanwhile, authorities have shut down the Meishan terminal at the Ningbo-Zhoushan container port, after one worker was infected with Covid-19.

A similar decision taken in May at the Yantian port in Shenzhen led to shipping delays around the globe.

Foremost on the economic calendar for Friday is a preliminary reading on the University of Michigan's US consumer confidence index for July.

Consensus is for an unchanged reading of 81.2.

Also due out in the States are import price figures covering the month of July.

Across the Channel meanwhile, final readings are due out on French and Spanish consumer prices in July, alongside a report on euro area foreign trade in June.

No major economic releases are scheduled in the UK.

Babcock bolsters balance sheet through disposal

Defence and aerospace engineer Babcock said it has sold its Frazer-Nash Consultancy to US peer KBR for £293m as part of its disposal programme to bolster its balance sheet. Frazer-Nash provides engineering and technology solutions across a broad range of national infrastructure, to operators and regulators from a network of nine UK and four Australian locations. The consultancy, which Babcock acquired in 2007, employs around 900 people.

Vectura's board of directors recommended a £1.1bn takeover by Philip Morris International after the close of trading on Thursday. The proposed acquisition values it at 165p a share, a 10p-a-share premium to a rival 155p-a-share offer from Carlyle, the US private equity firm.

Avon Protection cut its revenue guidance for 2021 and 2022 because of delayed orders and supply chain disruption. The company said it expected 2021 revenue to be in the range of $245m-$260m and reduced its guidance for 2022 revenue to $320m-$340m. Cash conversion in 2021 is likely to be about 50% because of inventory build-ups and delayed receipts from customers.