London open: Stocks gain as calm returns to markets

(Sharecast News) - London stocks rose in early trade on Monday as a sense of calm returned to markets after last week's turmoil. At 0825 BST, the FTSE 100 was up 0.6% at 8,220.01.

Richard Hunter, head of markets at Interactive Investor, said: "Asian markets were broadly ahead overnight, although a public holiday in Japan lessened the amount of information available to investors. The yen extended its decline against the US dollar, which has been positive in the sense of stemming the tide of the unwinding of the carry trade which resulted in some violent swings last week, while also boosting the exporters to which Japan has a significant exposure.

"China will also face some investor tests this week, culminating in the release of retail sales and industrial production figures on Thursday, for which hopes are not high. The consensus is that the readings will reveal further weakness in a tepid economic recovery, which could well heighten calls once more for some significant stimulus from the authorities, which to date has been in short supply.

"The economic theme will also continue in the UK, with the release later in the week of both unemployment and inflation data. The recent rate cut from the Bank of England is not expected to be repeated this year, and the numbers will add some focus as to whether the reduction was appropriate at this point. The more recent market volatility has shaved some of the gains seen over recent weeks for the FTSE 250, although the index is still up by 5% so far this year."

Investors were mulling comments from Catherine Mann, an external member of the Bank of England's monetary policy committee. In an Economics Show podcast with the Financial Times, Mann said the UK should not be "seduced" into thinking the battle against inflation is over after a short-term drop in the headline measure targeted by the Bank.

Mann said she was still concerned about upside risks to inflation despite the main rate remaining at the bank's 2% target in June.

Goods and services prices were set to rise again, Mann said, and wage pressures in the economy could take years to dissipate.

She told the FT that survey evidence suggested that companies were still expecting to make relatively big increases to both wages and prices, and "that says to me right now I'm looking at a problem for next year".

In equity markets, BT Group surged after Bharti Global bought Altice UK's 24.5% stake in the telecoms company.

"We welcome investors who recognise the long-term value of our business, and this scale of investment from Bharti Global is a great vote of confidence in the future of BT Group and our strategy," BT boss Alison Kirkby said.

Elsewhere, Marshalls fell as it posted a 20% drop in first-half adjusted pre-tax profit amid weak end markets.

In broker note action, JD Sports was knocked lower by a downgrade to 'sell' at Deutsche Bank, but Diageo fizzed higher after an upgrade to 'sector perform' from 'underperform' at RBC Capital Markets

Market Movers

FTSE 100 (UKX) 8,220.01 0.64% FTSE 250 (MCX) 20,695.68 0.34% techMARK (TASX) 4,804.93 0.52%

FTSE 100 - Risers

BT Group (BT.A) 138.75p 6.32% Beazley (BEZ) 735.50p 1.73% Rightmove (RMV) 545.60p 1.60% Burberry Group (BRBY) 694.80p 1.46% Persimmon (PSN) 1,599.50p 1.43% Marks & Spencer Group (MKS) 323.30p 1.41% Diploma (DPLM) 4,182.00p 1.41% Vistry Group (VTY) 1,310.00p 1.31% Rentokil Initial (RTO) 470.30p 1.29% Anglo American (AAL) 2,254.00p 1.26%

FTSE 100 - Fallers

JD Sports Fashion (JD.) 123.20p -1.79% CRH (CDI) (CRH) 6,480.00p -0.37% Unilever (ULVR) 4,718.00p -0.25% Frasers Group (FRAS) 840.00p -0.24% British American Tobacco (BATS) 2,798.00p -0.11% Darktrace (DARK) 595.40p -0.03% RELX FINANCE BV 3.375% GTD NTS 20/03/33 (BW73) 99.72p 0.00% Reckitt Benckiser Group (RKT) 4,180.00p 0.00% Haleon (HLN) 377.30p 0.08% Scottish Mortgage Inv Trust (SMT) 826.80p 0.10%

FTSE 250 - Risers

Bytes Technology Group (BYIT) 489.80p 4.75% Supermarket Income Reit (SUPR) 77.40p 4.03% SThree (STEM) 398.00p 3.51% Hochschild Mining (HOC) 172.40p 3.36% OSB Group (OSB) 494.00p 2.62% Bellway (BWY) 2,816.00p 2.47% Victrex plc (VCT) 1,064.00p 2.31% Hilton Food Group (HFG) 941.00p 2.28% Petershill Partners (PHLL) 226.00p 2.26% Ashmore Group (ASHM) 168.10p 2.19%

FTSE 250 - Fallers

Marshalls (MSLH) 327.50p -3.68% Volution Group (FAN) 500.00p -3.47% Syncona Limited NPV (SYNC) 115.00p -3.36% Bloomsbury Publishing (BMY) 660.00p -2.65% Genuit Group (GEN) 458.50p -2.45% Dunelm Group (DNLM) 1,150.00p -2.38% Urban Logistics Reit (SHED) 117.60p -2.16% Auction Technology Group (ATG) 444.50p -1.98% Premier Foods (PFD) 167.20p -1.65% Safestore Holdings (SAFE) 808.00p -1.46%