London open: FTSE rises on earnings optimism; travel shares rally

London stocks rose in early trade on Friday following an upbeat session on Wall Street, as earnings optimism helped to offset concerns about inflation.

At 0900 BST, the FTSE 100 was up 0.2% at 7,221.02, having earlier hit its highest level since the start of the pandemic.

Russ Mould, investment director at AJ Bell, said: "For now, strong results from banks, a decline in new jobless claims and lower than expected producer price inflation all from the US have served to put investors in a more positive mood.

"Next week looks more testing for markets as China is scheduled to produce data on economic growth which may disappoint."

In equity markets, Iberia and British Airways parent IAG and Premier Inn owner Whitbread rallied after the government said fully vaccinated passengers and children arriving in England from non-red list countries can take a lateral flow test from 24 October, instead of the more expensive PCR tests.

"That could lead to a rush of last-minute bookings for half-term travel, thereby benefiting airline earnings. The sector needs all the help it can get as it is one of the last industries still waiting to play catch-up with earnings following the pandemic," Mould said.

Mediclinic gained as the private healthcare provider reported a rise in first-half revenue, driven by a jump in patient activity across its three divisions.

Jupiter Fund Management was also on the front foot as it posted an increase in assets under management for the three months to 30 September.

BP and Shell both gushed higher as Brent crude hit a new three-year high, with BP given the additional boost of an upgrade to ‘buy’ at Berenberg.

Antofagasta was up after an upgrade to ‘sector perform’ at RBC Capital Markets.

Harbour Energy racked up healthy gains after an upgrade to ‘buy’ at Berenberg, while Qinetiq was in the black after heavy losses on Thursday and as Investec upped the shares to ‘buy’.

On the downside, Rio Tinto lost ground as the mining giant cut annual iron ore shipment forecasts, citing labour shortages in Western Australia.

Educational publisher Pearson also fell as it reported a rise in revenues as growth in assessment and qualifications offset lower US higher education enrolments due to Covid-19 infections.

Market Movers

FTSE 100 (UKX) 7,221.02 0.18%
FTSE 250 (MCX) 22,915.25 0.24%
techMARK (TASX) 4,564.16 0.03%

FTSE 100 - Risers

International Consolidated Airlines Group SA (CDI) (IAG) 181.52p 2.46%
Whitbread (WTB) 3,388.00p 2.26%
Evraz (EVR) 605.20p 1.71%
HSBC Holdings (HSBA) 432.60p 1.55%
Ocado Group (OCDO) 1,757.00p 1.44%
BP (BP.) 362.75p 1.41%
WPP (WPP) 998.40p 1.24%
Barclays (BARC) 196.68p 1.17%
Royal Dutch Shell 'B' (RDSB) 1,780.40p 1.10%
Glencore (GLEN) 389.00p 1.09%

FTSE 100 - Fallers

Pearson (PSON) 709.00p -2.74%
Rio Tinto (RIO) 5,007.00p -2.03%
Hikma Pharmaceuticals (HIK) 2,342.00p -1.39%
Polymetal International (POLY) 1,331.00p -1.33%
Johnson Matthey (JMAT) 2,720.00p -1.16%
Avast (AVST) 555.80p -1.00%
Unilever (ULVR) 3,843.00p -0.95%
United Utilities Group (UU.) 991.00p -0.80%
Smith (DS) (SMDS) 384.60p -0.75%
Experian (EXPN) 3,200.00p -0.62%

FTSE 250 - Risers

Mediclinic International (MDC) 324.20p 5.06%
QinetiQ Group (QQ.) 296.40p 3.71%
Micro Focus International (MCRO) 388.40p 3.19%
Harbour Energy (HBR) 390.80p 2.90%
Drax Group (DRX) 510.00p 2.49%
Rank Group (RNK) 166.80p 2.21%
Investec (INVP) 329.00p 2.21%
Capita (CPI) 48.75p 2.20%
Jupiter Fund Management (JUP) 244.80p 2.17%
Virgin Money UK (VMUK) 201.10p 2.08%

FTSE 250 - Fallers

Dunelm Group (DNLM) 1,276.00p -1.69%
Network International Holdings (NETW) 317.70p -1.67%
Hochschild Mining (HOC) 143.30p -1.31%
Future (FUTR) 3,528.00p -1.18%
Ashmore Group (ASHM) 319.60p -1.18%
Auction Technology Group (ATG) 1,368.00p -1.01%
AO World (AO.) 147.90p -1.00%
Pets at Home Group (PETS) 477.60p -1.00%
RHI Magnesita N.V. (DI) (RHIM) 3,020.00p -0.98%
FDM Group (Holdings) (FDM) 1,216.00p -0.98%