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FTSE 100 rallies as global sentiment improves, Persimmon up 3%
London traders were today buoyed by events in China as the FTSE 100 index peaked at 7470 before settling 99.76 points higher at 7438.34.
China’s latest package of support measures was one of the biggest factors helping to improve sentiment after an otherwise dismal August for stock markets.
Beijing announced the first cut in stamp duty on stock trades for 15 years, with the country’s central bank also easing various residential property rules.
The Shanghai Composite closed today’s session 1% higher and Hong Kong’s Hang Seng index maintained its recent recovery with a 2% rise.
UBS Global Wealth Management said: “If policy measures continue to be unveiled in the coming weeks, the market narrative may shift from “too little, too late” to a more confident stance as policymakers regain credibility.”
The handover led to a broad-based rally for London stocks on the first day back after the long weekend. Ocado was the top performer in the FTSE 100 after improving 4% or 27.8p to 769.6p, while Hong Kong-based insurer Prudential added 32.6p to 979.4p ahead of tomorrow’s interim results.
Housebuilder Persimmon rallied 3% or 35.5p to 1022.5p but this gain may have come too late to prevent FTSE 100 relegation when the quarterly reshuffle is calculated tonight.
Contenders for promotion include Marks & Spencer, which added half a penny at 217.5p, and the seals and controls business Diploma as it looks to complete a rise from the ranks of small caps to blue-chip status. It rose 37p to 3155p in today’s session.
The FTSE 250 index added 212.12 points to 18,343.14, with the China developments boosting Aston Martin Lagonda after a surge of 13.4p to 351.4p.
On AIM, Virgin Wines rose 2.5p to 47p after its chief executive Jay Wright spent £120,000 topping up his stake in the online retailer to 8.8%. He was joined by chair John Risman, who now holds 2.9% after spending £50,000.
Fresh food prices help retail inflation to slow in August, new figures suggest
Price rises in British shops have slowed to their lowest rate since October last year, but keep going up significantly, new data has shown.
The British Retail Consortium (BRC) reported on Tuesday that prices rose 6.9% in the year to August, down from 8.4% in July.
It does not mean that things are getting cheaper, just that they increased in price more slowly between September 2022 and August 2023 than they did between August 2022 and July 2023.
The BRC showed that the main reason that retail inflation dropped was because fresh food prices rose less rapidly.
Read more here
Wilko administrators defend record amid union criticism
The administrators of Wilko defended their work after reports today that the GMB Union was seeking an ‘urgent’ meeting with Business Secretary Kemi Badenoch. The union has criticised the administrators for not fully considering all bids, but the administrators at PwC said they were “working relentlessly” to save the business, while also following their deuty to secure a return to shareholders.
A spokesperson for the administrators said: “Since our appointment as administrators of Wilko we have worked relentlessly to secure a sale of the business, and talks are continuing with a number of parties. As administrators we’re intent on achieving the best outcome for everyone involved while preserving as many jobs as possible and adhering to our statutory duty to act in the best interests of the creditors as a whole.
“It would be inappropriate to comment on individual bidders or interested parties at this stage in the process.”
Market snapshot as FTSE 100 gains almost 100 points
Take a look at today’s market snapshot as the FTSE 100 is more than 1% higher this morning.
FTSE 100 up more than 1%, JD Sports Fashion 3% higher
The FTSE 100 index is 1.2% higher during a better-than-expected start to the week for London shares.
The jump of 96.40 points to 7434.98 follows gains of 3% for shares in Hong Kong-based insurer Prudential as well as JD Sports Fashion and Anglo American.
Shares in outsourcing group Bunzl lead the top flight, up 4% or 119p to 2843p following a strong reaction to half-year results.
The positive mood was also seen in the FTSE 250 index, which rallied 262.33 points to 18,393.35. Mid-cap risers included Aston Martin Lagonda, with shares up another 5% or 16.4p to 354.4p.
Binance sets up shop in Poland after Belgium snub
Crypto exchange Binance has opened for business in Poland after it was told to cease offering virtual currency services by regulators in Belgium.
Binance said the move will allow it to comply “with its regulatory obligations and can continue to provide services to Belgian users”.
The firm also had to suspend services to Dutch users in July and is facing a lawsuit by regulators in the US amid a global crackdown on crypto companies.
Bunzl boosts 2023 profit forecast as half-year revenue rises
Bunzl, the coffee cup to Covid mask supplier, reported a rise in half-year profits today and upped its forecasts for 2023, after it was able to pass price increases on to its customers.
The FTSE 100 company filed a 7% rise in half year profit of £317 million and said it now expects full-year adjusted operating profit to rise. The upbeat outlook came despite weakness in the food service sector in North America.
Revenue rose 4.5% to £5.9 billion.
It also said sales of pandemic-related products held above 2019 levels, but were off their 2020 peak.
Its shares opened up 111p to 2829p.
London helps drive growth for Irish hotels group Dalata
Irish hotel group Dalata says its growing London portfolio drove its UK growth in the second quarter, growing twice as fast as the rest of UK
The owner of the Clayton and Maldron chains saw 23% growth in like-for-like revenue per available room in London, compared to 12% elsewhere in the UK. The group said this was driven both by higher occupancy and higher room rates.
Dalata has been expanding in London lately, and is set to have 876 rooms in the capital when the Maldron Hotel in Shoreditch opens.
That helped group profit rise by 24% to €103.4 million (£88.6 million).
CEO Dermot Crowley said: “Our performance year to date has been exceptional, thanks to all of our teams throughout the business, whose commitment and dedication are evident in the results announced today and in the continuous delivery of our ambitious growth strategy.
“We have continued to expand our asset portfolio with the two recent high-quality acquisitions in London which are both performing well.
“This speaks to the strength of our balance sheet and our development team’s ability to identify and deliver additional rooms in times of market volatility and uncertainty.”
Daslata is the latest hotel chain to report booming business, with little sign of the public cutting back spending on travel even as they reduce spend almost everywhere else.
IG boss to quit when medical leave ends
IG Group CEO June Felix, currently on medical leave, will step down from the role rather than returning to the helm of the online trading business.
She took medical leave in June, but will now step down as CEO and director immediately and cease employment from 29 September.
Charlie Roses will continue as acting CEO, but IG said it has begun a search for a permanent replacement.
Mike McTighe, chair of IG Group, commented: “On behalf of the Board, I would like to extend our best wishes to June as she continues her recovery. We thank her for the significant contribution she has made over the past eight years as a board member and especially as Group CEO for almost five years. During her tenure as CEO the company has successfully pursued a strategy to diversify the business while at the same time strengthening its core OTC business resulting in a doubling of the Group’s revenue and profit over the period.”
June Felix said: “It has been a great privilege to build and lead such a talented, ambitious group of people as the CEO of IG Group for nearly five years. It has been through everyone’s collective effort that we have built a stronger, more diverse company. For this, I thank my executive team, all of my colleagues and the Board of IG Group for an unforgettable period.”
Asia and US markets rally, FTSE 100 seen slightly higher
Asia markets extended their gains this morning after support measures including a stamp duty cut on stock trades were announced by regulators in China over the weekend.
The moves have helped to draw investors back to the market, with the Hang Seng in Hong Kong up another 2% and the Shanghai Composite ahead by more than 1%. Japan’s Nikkei 225 was also in positive territory at a two-week high.
Wall Street closed higher for the second successive session after Friday’s guidance from Federal Reserve chair Jerome Powell that further tightening of monetary policy will be a finely balanced decision.
He said inflation remains too high but that policymakers will need to tread carefully in order to avoid causing unnecessary harm to the US economy.
The Nasdaq Composite finished Monday’s session up by 0.8% and the S&P 500 index rose 0.6%. London’s FTSE 100 index is forecast by IG Index to start the week five points higher at 7344.
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