London open: FTSE up as miners rally; Pennon slumps

At 0915 BST, the FTSE 100 was up 0.9% at 7,324.15.

Russ Mould, investment director at AJ Bell, said: "Boom! Periods when the FTSE 100 rises in the region of 1% in a day should be celebrated given how this year has been so gloomy for investors. Today, the fireworks are most definitely lighting up the sky and the UK market is regaining its mojo.

"Miners revved their engines yesterday following the G7 $600 billion infrastructure plan and were striking more gold today as investors continue to flock to the sector.

"Perhaps helping the cause was news that China would reduce the Covid quarantine period for visitors from overseas, perhaps a sign that the Asian superpower’s extra tough pandemic measures might be relaxed going forward. That would help to alleviate fears that commodities demand would be weaker from China if it shut up shop every time a new Covid wave came."

In equity markets, miners were among the top performers again, with Rio Tinto, Anglo American, Glencore and Antofagasta all higher.

Energy services company Petrofac rallied as it said trading and expectations were in line with guidance, adding that its engineering and construction division was set to secure strong order intake in the second half and deliver backlog growth year on year.

On the downside, Pennon slumped as it said that as part of its ongoing investigation into how water and wastewater companies manage their wastewater treatment works, Ofwat has included South West Water alongside the five companies which received formal notices in March 2022.

Severn Trent and United Utilities were also in the red, with a note on the sector by JPMorgan Cazenove also having an impact. JPM downgraded Severn Trent to ‘underweight’ from ‘neutral’.

"The UK water sector has performed well since the start of the regulatory period on 1 April 2020, with all three listed companies delivering strong returns and asset growth, while maintaining dividend growth at least in line with inflation," JPM said.

"However, we are turning cautious on the subsector, given our belief that returns from April 2025 will be lower than the market currently expects."

It put Severn Trent and Pennon on "negative Catalyst Watch" into July 7th, when regulator Ofwat is due to publish a draft methodology for the next regulatory period.

Market Movers

FTSE 100 (UKX) 7,324.15 0.91%
FTSE 250 (MCX) 19,335.66 0.09%
techMARK (TASX) 4,347.99 0.20%

FTSE 100 - Risers

Rolls-Royce Holdings (RR.) 86.10p 5.24%
Rio Tinto (RIO) 5,228.00p 3.50%
Anglo American (AAL) 3,232.50p 3.16%
Glencore (GLEN) 465.30p 2.77%
Centrica (CNA) 84.28p 2.53%
Shell (SHEL) 2,164.50p 2.46%
BP (BP.) 400.55p 2.29%
Harbour Energy (HBR) 371.30p 2.26%
InterContinental Hotels Group (IHG) 4,545.00p 2.07%
Endeavour Mining (EDV) 1,781.00p 2.06%

FTSE 100 - Fallers

Severn Trent (SVT) 2,707.00p -5.12%
United Utilities Group (UU.) 1,013.00p -2.13%
RS Group (RS1) 850.50p -1.39%
Scottish Mortgage Inv Trust (SMT) 738.60p -1.39%
Aveva Group (AVV) 2,416.00p -1.35%
Intermediate Capital Group (ICP) 1,399.50p -1.27%
Howden Joinery Group (HWDN) 614.80p -1.19%
Berkeley Group Holdings (The) (BKG) 3,770.00p -1.10%
Spirax-Sarco Engineering (SPX) 9,668.00p -1.06%
Bunzl (BNZL) 2,640.00p -0.94%

FTSE 250 - Risers

Petrofac Ltd. (PFC) 123.60p 3.87%
Babcock International Group (BAB) 309.00p 2.59%
easyJet (EZJ) 413.10p 2.35%
Diversified Energy Company (DEC) 116.70p 2.19%
Tullow Oil (TLW) 50.10p 2.12%
HarbourVest Global Private Equity Limited A Shs (HVPE) 2,170.00p 2.12%
Playtech (PTEC) 560.00p 2.10%
Serco Group (SRP) 177.80p 2.01%
Mitchells & Butlers (MAB) 206.00p 1.98%
SSP Group (SSPG) 247.50p 1.98%

FTSE 250 - Fallers

Pennon Group (PNN) 997.00p -6.82%
Network International Holdings (NETW) 191.20p -2.55%
Baltic Classifieds Group (BCG) 137.80p -2.41%
Essentra (ESNT) 265.50p -2.39%
Diploma (DPLM) 2,228.00p -2.11%
Molten Ventures (GROW) 454.40p -2.03%
Safestore Holdings (SAFE) 1,070.00p -1.56%
Jupiter Fund Management (JUP) 154.90p -1.53%
Bridgepoint Group (Reg S) (BPT) 268.40p -1.40%
Genuit Group (GEN) 400.00p -1.36%