London open: Stocks rally; AB Foods, Bunzl in the black

At 0840 GMT, the FTSE 100 was up 0.9% at 7,946.15. Stocks in the UK and US fell on Friday after the release of hotter-than-expected PCE inflation data.

In corporate news, Primark owner Associated British Foods rallied after it lifted full-year guidance as consumer spending proved to be more resilient in the first half and inflationary volatility eased.

The group said it now expects adjusted operating profit to be broadly in line with the prior year, having previously forecast adjusted operating profit below the €1.44bn made in 2021-22.

Richard Hunter, head of markets at Interactive Investor, said: "AB Foods has upgraded its expectations, boosted by a strong showing from Primark, the continued benefits of a diversified business and cost pressures which are showing signs of finally weakening.

"Primark remains a key driver in the group’s improving fortunes. The return of the consumer to physical shopping and the brand’s value offering are a complementary and compelling combination. While the group is understandably cautious on the immediate outlook for discretionary spending given the tough economic backdrop, for the moment the consumer is showing signs of resilience which defy the retail naysayers."

Elsewhere, international distribution group Bunzl was also higher after it reported a rise in annual earnings, driven by product cost inflation, volume recovery in the first half and growth from acquisitions.

Pre-tax profit for 2022 rose 11.6% to £634.6m, as revenue grew 9.8% at constant exchange rates to £12bn. Shareholders were rewarded with a 10% rise in the total dividend to 62.7p a share.

Bunzl also revealed it had bought a business in Germany and completed the acquisition of another in Canada.

On the downside, Dechra Pharmaceuticals tumbled after it warned that based on the recent US de-stocking and current exchange rates, it now expects full-year underlying operating profit to be at the lower end of analyst expectations.

In broker note action, Shell was boosted by an upgrade to ‘buy’ from ‘neutral’ at Goldman Sachs, while Trainline rose after an upgrade to ‘buy’ at Deutsche bank.

Quilter was knocked lower by a downgrade to ‘sell’ at Citi.

Market Movers

FTSE 100 (UKX) 7,946.15 0.86%
FTSE 250 (MCX) 19,769.20 0.37%
techMARK (TASX) 4,642.26 0.57%

FTSE 100 - Risers

Rolls-Royce Holdings (RR.) 142.02p 4.40%
Bunzl (BNZL) 3,086.00p 2.42%
Shell (SHEL) 2,556.00p 2.28%
International Consolidated Airlines Group SA (CDI) (IAG) 158.16p 2.20%
Associated British Foods (ABF) 1,989.00p 2.18%
Prudential (PRU) 1,243.00p 2.18%
Beazley (BEZ) 690.00p 2.15%
Persimmon (PSN) 1,423.50p 2.04%
BT Group (BT.A) 139.90p 1.86%
BP (BP.) 560.10p 1.80%

FTSE 100 - Fallers

M&G (MNG) 209.40p -0.90%
HSBC Holdings (HSBA) 632.80p -0.46%
Airtel Africa (AAF) 123.10p -0.40%
London Stock Exchange Group (LSEG) 7,514.00p -0.32%
Reckitt Benckiser Group (RKT) 5,800.00p -0.24%
Smith & Nephew (SN.) 1,213.00p -0.16%
Endeavour Mining (EDV) 1,695.00p -0.06%
Hargreaves Lansdown (HL.) 842.20p -0.02%
Rio Tinto (RIO) 5,668.00p 0.02%
Sage Group (SGE) 751.20p 0.11%

FTSE 250 - Risers

Aston Martin Lagonda Global Holdings (AML) 201.60p 3.92%
Pacific Horizon Inv Trust (PHI) 642.00p 2.72%
Babcock International Group (BAB) 341.60p 2.40%
RHI Magnesita N.V. (DI) (RHIM) 2,716.00p 2.34%
Trainline (TRN) 251.70p 2.32%
Harbour Energy (HBR) 296.20p 2.14%
Capital & Counties Properties (CAPC) 126.70p 2.10%
Shaftesbury (SHB) 418.80p 2.00%
Currys (CURY) 80.00p 1.91%
easyJet (EZJ) 485.70p 1.85%

FTSE 250 - Fallers

Dechra Pharmaceuticals (DPH) 2,700.00p -13.02%
Quilter (QLT) 91.42p -4.39%
Capricorn Energy (CNE) 249.00p -1.74%
PureTech Health (PRTC) 219.00p -1.13%
CMC Markets (CMCX) 243.00p -1.02%
Scottish American Inv Company (SAIN) 502.00p -0.99%
Senior (SNR) 160.80p -0.99%
BBGI Global Infrastructure S.A. NPV (DI) (BBGI) 151.20p -0.92%
Auction Technology Group (ATG) 690.00p -0.86%
BH Macro Ltd. GBP Shares (BHMG) 442.00p -0.67%