London open: Stocks edge higher as oil rises
London stocks edged higher in early trade on Monday, with energy shares in the black as oil prices rose.
At 0830 BST, the FTSE 100 was up 0.4% to 7,456.55, while the pound was up 0.2% against the euro at 1.1389 and 0.3% firmer versus the dollar at 1.2754.
Investors were mulling over news that the Italian government has been forced to bail out two banks in the Venice region at a cost of £4.6bn. The good assets of Banca Popolare di Vicenza and Veneto Banca will be taken on by Intesa Sanpaolo for €1 while the bad assets will be left on the government's books, in a rescue Prime Minister Paolo Gentiloni said was to ensure "the good health of our banking system".
Italy's FTSE MIB was up 1.1% in early trade.
CMC Markets analyst Michael Hewson said: "So much for the so called new single European rule book and the much vaunted European Banking Union. It appears that there is one rule for Spanish banks, and the recent rescue of Popular Bank, and another for Italian banks.
"Let’s hope the Italian government has deep pockets given that this particular bailout is a fraction of the non-performing loans in the Italian banking system, of which it is estimated there are about €300bn."
Back in the UK, the focus was likely to be on the conclusion of Prime Minister Theresa May's negotiations with Ireland's Democratic Unionist Party on a confidence and supply agreement aimed at giving the Tories a working majority in the House of Commons.
Accendo Markets analyst Mike van Dulken said: "DUP leader Arlene Foster goes to Downing St again today as talks enter a third week. Time is of the essence as we edge towards a June 29 deadline for resolution of Northern Ireland’s political stalemate to reach a power-sharing agreement to restore the devolved Northern Irish assembly."
"Today also sees the publishing of 15 pages of the government’s proposed plan to protect the rights of the 3.2m EU workers living in the UK before Brexit."
Oil giants Shell and BP gushed higher as oil prices advanced, with West Texas Intermediate and Brent crude up 1.4% to $43.61 and $46.17 a barrel, respectively.
Elsewhere, Ultra Electronics ticked higher as it confirmed it was in advanced discussions to acquire NYSE-listed Sparton Corporation, subject to regulator and shareholder approvals.
Hikma Pharmaceuticals gained ground as it announced the retirement of Michael Raya, the chief executive officer of the US business, which it said it was splitting into two units - a generics division and an injectables division.
Amec Foster Wheeler shares pushed up after it said it has completed the sale of its circulating fluidised bed (CFB) boiler business to Sumitomo Heavy Industries for $170m, which will be used to reduce net debt.
On the data front, BBA mortgage approvals are at 0930 BST.