London open: Stocks rise as investors weigh China reopening
London’s equity markets returned from the Christmas break in the green on Wednesday, even as concern around China’s skyrocketing Covid-19 case numbers continued.
At 0815 GMT, the FTSE 100 was up 0.78% at 7,530.93, and the FTSE 250 was ahead 0.25% at 18,877.11.
Sterling was also above the waterline, last trading up 0.13% on the dollar at $1.2041, as it strengthened 0.12% against the euro to change hands at €1.1314.
“US and European futures are trading in a narrow range while trading volume continues to remain on the low side,” said AvaTrade chief market analyst Naeem Aslam.
“Yesterday, we did see the US stock indices recording small gains, but the percentage gains in the US stock indices were still on the low side and hardly exciting enough to attract new capital.
“Investors are enthusiastic about China re-opening its economy.
“However, there are plenty of reports which suggest that Covid cases are on the rise in China, which really threatens the supply chain.”
It was looking to be a quiet day on the economic calendar, as expected, although the Richmond Manufacturing Index and pending home sales data was due out stateside at 1500 GMT.
Economists were expecting prints of -10 and -0.9%, respectively.
“When it comes to the housing data, it is pretty clear that the housing market is prone to a lot of risk and weakness going into 2023 as the Fed continues to embark on its hawkish monetary policy,” Naeem Aslam added.
“The Fed has already increased the interest rate a number of times, and it is widely anticipated that the Fed is unlikely to take its foot off the gas paddle next year as well.
“This means that the housing market in the US is most likely to slow down even further, and we will see the housing market producing even more horrible numbers in 2023.”
Stocks were in a mixed state at the closing bell on Wall Street on Tuesday, with the Dow Jones Industrial Average up 0.11% at 33,241.56.
The S&P 500, meanwhile, fell 0.4% to 3,829.25, and the Nasdaq Composite slid 1.38% to 10,353.23.
On London’s equity markets, AstraZeneca was up after it said its immunotherapies Imfinzi and Imjudo have been approved in Japan for the treatment of three cancer types - advanced liver, biliary tract and lung.
The FTSE 100 pharmaceuticals giant said the approvals would authorise Imfinzi in combination with Imjudo for the treatment of adult patients with unresectable hepatocellular carcinoma (HCC) and for the treatment of adult patients with unresectable, advanced or recurrent non-small cell lung cancer (NSCLC) in combination with chemotherapy.
Imfinzi was also authorised for the treatment of adult patients with unresectable HCC as monotherapy and for the treatment of adult patients with curatively unresectable biliary tract cancer (BTC) in combination with chemotherapy.
Elsewhere, Fresnillo was also higher after confirming that the final testing of the downstream power distribution and control systems at the Juanicipio project was now complete.
The FTSE 100 company said that concluded the additional testing requested by the state-owned power company, CFE, to verify compatibility between new and updated substation equipment installed by Fresnillo on behalf of Fresnillo and MAG Silver.
As such, the entire system had now been energised, and commissioning of the project had formally started.
Specialist engineering group IMI also managed gains as its completed its acquisition of Heatmiser.
The FTSE 250 company announced the acquisition plans on 8 November, for an enterprise value of £110m, with up to a further £8m based on Heatmiser's future financial performance
It said Heatmiser would become part of IMI Hydronic Engineering.
Reporting by Josh White for Sharecast.com.