London open: Stocks rise as housebuilders bounce back; OPEC eyed

London stocks rose in early trade on Friday, helped along by a rebound for housebuilders as investors continued to digest a more hawkish than expected policy announcement from the Bank of England and looked ahead to the OPEC meeting in Vienna.

At 0830 BST, the FTSE 100 was up 0.4% to 7,584.03, while the pound was flat against the euro at 1.1406 and up 0.4% versus the dollar at 1.3297.

CMC Markets analyst Michael Hewson said: "Yesterday’s surprise conversion to the hawk camp by chief economist Andrew Haldane, he of the August 2016 QE ‘sledgehammer’, appears to have had a change of heart when it comes to being concerned about the possible risks of inflation, as he joined external MPC members Michael Saunders and Ian McCafferty in pushing for an increase in the level of bank rate.

"This unexpected development has helped put a floor under the pound, which hit a seven month low against the US dollar yesterday and which had been in a long steady decline since Governor Carney’s remarks at the IMF in mid-April when he cautioned about taking a May rate hike for granted."

Oil prices were in focus amid expectations that OPEC will end its production ceiling and lift supply capacity by between 500,000 and 1m barrels a day. West Texas Intermediate was up 1.3% to $66.39 a barrel and Brent crude was 1.4% firmer at $74.11.

In addition, the EU’s sanctions against a range of US goods kick in on Friday. Hewson said "these could well prompt a counter response from the US, with the European auto sector likely to be next in the firing line, if President Trump remains true to his word".

Housebuilders were on the front foot, recovering from losses in the previous session after the Bank of England’s policy announcement raised the prospect of an August rate hike sparking worries about the impact of higher borrowing costs on demand. Barratt, Berkeley, Taylor Wimpey and Persimmon all gained. Analysts at Liberum said that nervousness around rate rises on Thursday was overdone, especially as the bond market did not seem to show much reaction to the extra dissenter in the MPC vote.

Luxury fashion brand Burberry was the standout gainer after UBS upped its stance on the neutral-rated stock to 2,150p from 1,900p.

Playtech pushed higher after Italian financial market regulator Consob approved the gambling software group’s mandatory takeover offer for the remaining shares of Italian gaming firm Snaitech that it does not own.

Syncona was a high riser after saying that its portfolio company, Autolus Therapeutics, had announced the pricing of its US initial public offering. Syncona's 33.8% stake in the business will be valued at $231m (£174.4m).

Elsewhere, Shire slipped despite saying that tests of patients with metastatic pancreatic cancer have been shown to benefit from a combined treatment with its Onivyde drug.

In broker note action, CYBG was cut to ‘sell’ at Investec, while Bodycote was under the cosh after a downgrade to ‘sell’ at Goldman Sachs and Renishaw fell after a downgrade to ‘neutral’ at GS.

Spire Healthcare was initiated at ‘add’ by Peel Hunt and FirstGroup rose after an initiation at ‘buy’ by Goldman.

Market Movers

FTSE 100 (UKX) 7,584.03 0.37%
FTSE 250 (MCX) 20,775.77 0.23%
techMARK (TASX) 3,520.14 -0.12%

FTSE 100 - Risers

Burberry Group (BRBY) 2,140.00p 1.66%
Barratt Developments (BDEV) 525.00p 1.39%
Berkeley Group Holdings (The) (BKG) 3,830.00p 1.32%
Taylor Wimpey (TW.) 180.60p 1.32%
Glencore (GLEN) 376.45p 1.31%
Ocado Group (OCDO) 1,053.00p 1.25%
Rio Tinto (RIO) 4,153.50p 1.24%
Persimmon (PSN) 2,561.00p 1.23%
Anglo American (AAL) 1,671.40p 1.16%
Hargreaves Lansdown (HL.) 1,985.50p 1.04%

FTSE 100 - Fallers

Micro Focus International (MCRO) 1,352.00p -1.02%
AstraZeneca (AZN) 5,225.00p -0.57%
Coca-Cola HBC AG (CDI) (CCH) 2,544.00p -0.43%
Paddy Power Betfair (PPB) 8,245.00p -0.42%
Carnival (CCL) 4,690.00p -0.30%
Sky (SKY) 1,402.50p -0.18%
British American Tobacco (BATS) 3,833.50p -0.14%
Informa (INF) 814.40p -0.10%
SEGRO (SGRO) 659.40p -0.09%
Shire Plc (SHP) 4,084.50p -0.09%

FTSE 250 - Risers

Syncona Limited NPV (SYNC) 233.63p 3.84%
Wood Group (John) (WG.) 639.40p 3.66%
Spire Healthcare Group (SPI) 254.80p 2.91%
Britvic (BVIC) 780.50p 2.56%
IntegraFin Holding (IHP) 358.00p 2.29%
Euromoney Institutional Investor (ERM) 1,383.40p 2.17%
Tullow Oil (TLW) 232.00p 2.07%
Centamin (DI) (CEY) 116.35p 1.97%
Polypipe Group (PLP) 379.20p 1.77%
FirstGroup (FGP) 83.70p 1.76%

FTSE 250 - Fallers

Renishaw (RSW) 5,180.08p -5.82%
Bodycote (BOY) 980.00p -2.87%
RPC Group (RPC) 672.40p -1.41%
Fisher (James) & Sons (FSJ) 1,752.00p -1.02%
Stobart Group Ltd. (STOB) 246.00p -1.01%
Millennium & Copthorne Hotels (MLC) 505.00p -0.98%
Wetherspoon (J.D.) (JDW) 1,232.00p -0.81%
BTG (BTG) 528.00p -0.75%
The Renewables Infrastructure Group Limited (TRIG) 109.70p -0.63%
Renewi (RWI) 78.80p -0.63%