London open: Stocks rally again despite political chaos

London stocks rose in early trade on Thursday following positive sessions in the US and Asia, as investors mulled the latest minutes from the US Federal Reserve and continued to shrug off political turmoil.

At 0915 BST, the FTSE 100 was up 1.1% at 7,184.44.

Prime Minister Boris Johnson was hanging on to his position by the skin of his teeth despite more than 50 ministers resigning amid claims he misled them over his knowledge of sexual harassment allegations against an MP he promoted as an aide.

Neil Wilson, chief market analyst at Makets.com, said: "Stock markets across Europe are firmer this morning with the major bourses notching 1% gains in early trade following a solid session in Asia and a third straight positive day for Wall Street.

"Boris clings on but the resignations keep on coming and even that great political heavyweight and giant intellect (!) Zahawi has called for him to go only two days after being made chancellor. It’s over for sure.

"FOMC minutes were clear and unambiguous: the Fed will do whatever it takes to tame inflation. Ninety times was ‘inflation’ mentioned in the minutes, while mentions of ‘recession’ struck out at zero."

Market participants were also digesting the latest survey from Halifax, which showed that house prices rose in June at their fastest monthly pace since early 2007 despite the cost-of-living crisis.

Prices rose 1.8% from May, when they increased 1.2%. On the year, meanwhile, house prices were up 13% in June, versus a 10.7% jump the month before. The average house price pushed up to another record high of £294,845.

The annual growth rate was the highest since late 2004.

Russell Galley, managing director at Halifax, said the UK market had continued to defy any expectations of a slowdown.

"The supply-demand imbalance continues to be the reason house prices are rising so sharply," he said. "Demand is still strong - though activity levels have slowed to be in line with pre-Covid averages - while the stock of available properties for sale remains extremely low.

"Property prices so far appear to have been largely insulated from the cost-of-living squeeze. This is partly because, right now, the rise in the cost of living is being felt most by people on lower incomes, who are typically less active in buying and selling houses. In contrast, higher earners are likely to be able to use extra funds saved during the pandemic, with latest industry data showing that mortgage lending has increased by the highest amount since last September."

In equity markets, miners were on the rise as metals prices pushed up, with Glencore, Anglo American, Rio Tinto and Antofagasta all higher.

RS Group rallied after an upbeat trading statement, while Legal & General gained after saying it had had a good start to 2022, and that it expects to deliver double-digit growth in cash and capital generation for the first half.

Currys surged even as the electricals retailer said it expects annual profits to be lower as consumers started to tighten their belts amid the cost-of-living crisis.

Keith Bowman, investment analyst at Interactive Investor said Currys had reported "broadly encouraging annual results following what has been a tough few years".

"Group sales on a currency adjusted basis are flat, although up 10% on a two-year like-for-like basis, while both pre-tax profit and the dividend payment are ahead of City estimates," he said.

Drax powered ahead after it said late on Wednesday that full-year adjusted EBITDA was set to be "slightly above" the top of the range of analyst expectations.

On the downside, housebuilder Persimmon slumped even as it said it expects half-year profits to be "modestly" higher than expectations, despite rising energy and raw materials prices and wage increases. Peers Barratt and Berkeley followed suit.

Entain fell after saying that online gaming revenue would be flat in the current year, as customers started to cut back on spending amid soaring inflation and prices.

Market Movers

FTSE 100 (UKX) 7,184.44 1.08%
FTSE 250 (MCX) 18,720.82 0.68%
techMARK (TASX) 4,364.29 0.75%

FTSE 100 - Risers

Glencore (GLEN) 425.50p 4.17%
Anglo American (AAL) 2,731.50p 3.90%
Standard Chartered (STAN) 598.20p 3.46%
BP (BP.) 381.00p 3.35%
Legal & General Group (LGEN) 240.70p 3.22%
RS Group (RS1) 887.50p 3.20%
Barclays (BARC) 150.90p 2.75%
NATWEST GROUP PLC ORD 100P (NWG) 216.60p 2.56%
Antofagasta (ANTO) 1,066.50p 2.55%
Rio Tinto (RIO) 4,800.50p 2.41%

FTSE 100 - Fallers

Entain (ENT) 1,075.50p -5.66%
Persimmon (PSN) 1,760.00p -5.63%
Barratt Developments (BDEV) 447.40p -2.68%
Coca-Cola HBC AG (CDI) (CCH) 1,789.00p -2.64%
Berkeley Group Holdings (The) (BKG) 3,697.00p -2.14%
Next (NXT) 6,032.00p -1.73%
Taylor Wimpey (TW.) 113.55p -1.65%
Aveva Group (AVV) 2,329.00p -1.44%
British American Tobacco (BATS) 3,447.50p -1.18%
Flutter Entertainment (CDI) (FLTR) 8,376.00p -0.73%

FTSE 250 - Risers

Currys (CURY) 71.35p 7.21%
Drax Group (DRX) 665.00p 6.49%
Mediclinic International (MDC) 470.40p 6.38%
Ferrexpo (FXPO) 125.60p 4.49%
Aston Martin Lagonda Global Holdings (AML) 406.20p 3.20%
Trainline (TRN) 349.90p 2.91%
Renishaw (RSW) 3,906.00p 2.84%
Hochschild Mining (HOC) 82.10p 2.75%
Frasers Group (FRAS) 685.00p 2.70%
Micro Focus International (MCRO) 273.10p 2.67%

FTSE 250 - Fallers

Chemring Group (CHG) 300.50p -4.30%
Just Group (JUST) 64.75p -2.41%
Redde Northgate (REDD) 326.50p -2.25%
Baltic Classifieds Group (BCG) 135.40p -1.88%
Paragon Banking Group (PAG) 478.00p -1.81%
Big Yellow Group (BYG) 1,309.00p -1.80%
Vistry Group (VTY) 801.50p -1.54%
Johnson Matthey (JMAT) 1,849.50p -1.31%
Workspace Group (WKP) 544.50p -1.27%
Sirius Real Estate Ltd. (SRE) 89.70p -1.21%