London open: FTSE rallies as oil prices rise

Opening Market Report
07:31, 4th July 2022

(Sharecast News) - London stocks rose in early trade on Monday, helped along by strength in the energy sector, although trade was expected to be fairly quiet as US markets will be closed for the July 4 holiday.
At 0840 BST, the FTSE 100 was up 1.2% at 7,252.66.

Richard Hunter, head of markets at Interactive Investor, said: "Markets have generally started the new half year in more positive mood, possibly boosted by some early quarter portfolio positioning.

"US markets started July on a stronger note, ahead of another shortened trading week due to the Independence Day holiday today. The week will nonetheless bring some more economic clues, with the release of the latest Federal Reserve minutes and the non-farm payrolls report on Friday.

"The latter will be of particular interest to investors, since recent economic data has tended to suggest that the Fed's recent aggressive tightening policy is already starting to have some impact. A slowing of consumer spending and income, alongside a higher than expected drop in manufacturing activity has left the door open to more bullish investors, who anticipate a lighter touch from the Fed if the contractionary signs continue."

As far as UK equity markets are concerned, Hunter said: "With the second quarter reporting season closing in quickly amid lower expectations, hopes remain that there could be some rather more upbeat noises coming from boardrooms on the immediate outlook."

Oil and gas company Harbour Energy was the standout gainer on the FTSE 100 index, closely followed by BP and Shell, as oil prices rose amid concerns about supply.

Spirax-Sarco Engineering gained as the thermal energy management specialist said it had entered into exclusive negotiations to buy Vulcanic from French private equity group Qualium for €261.7m.

Low-cost carrier Wizz Air flew a little higher after saying it almost trebled passenger numbers last month as more people resumed travelling as Covid restrictions eased.

On the downside, Pets at Home slid after RBC Capital Markets downgraded the shares to 'underperform' from 'sector perform' and slashed the price target to 280p from 330p. The bank said PETS has a strong position as a specialist player in the UK pet care market. "However, we believe valuation looks full and consensus forecasts look demanding."

Homeware retailer Dunelm was also knocked lower by a rating downgrade at RBC, which cut the stock to 'sector perform' from 'outperform'. The bank said it expects margins to moderate in the near term, given more normalised promotional activity and input cost pressure.

Builders' merchant Grafton was down after it announced that Gavin Slark would be stepping down as chief executive later in the year after 11 years in the role.

AO World tumbled following a report the online electrics retailer was facing a cash crunch after a leading credit insurer cut cover for suppliers following a deterioration in its finances. The Sunday Times cited market sources as saying that Atradius has slashed cover for suppliers to AO.

Market Movers

FTSE 100 (UKX) 7,252.66 1.17%
FTSE 250 (MCX) 18,703.78 0.36%
techMARK (TASX) 4,335.65 0.94%

FTSE 100 - Risers

Harbour Energy (HBR) 347.80p 4.57%
BP (BP.) 400.00p 4.03%
Shell (SHEL) 2,190.00p 3.25%
Spirax-Sarco Engineering (SPX) 10,320.00p 2.64%
Hikma Pharmaceuticals (HIK) 1,661.00p 2.44%
BT Group (BT.A) 189.85p 2.43%
Endeavour Mining (EDV) 1,677.00p 2.32%
Vodafone Group (VOD) 130.14p 2.18%
Smith (DS) (SMDS) 279.70p 2.15%
Auto Trader Group (AUTO) 552.80p 1.95%

FTSE 100 - Fallers

Antofagasta (ANTO) 1,097.00p -2.18%
Intermediate Capital Group (ICP) 1,310.00p -0.49%
Unite Group (UTG) 1,052.00p -0.47%
Avast (AVST) 516.80p -0.39%
Kingfisher (KGF) 246.00p -0.36%
Scottish Mortgage Inv Trust (SMT) 726.60p -0.36%
Howden Joinery Group (HWDN) 603.80p -0.23%
St James's Place (STJ) 1,088.50p -0.23%
JD Sports Fashion (JD.) 117.40p -0.21%
Ocado Group (OCDO) 812.80p -0.15%

FTSE 250 - Risers

Tullow Oil (TLW) 45.68p 4.96%
Convatec Group (CTEC) 233.40p 3.73%
Wood Group (John) (WG.) 155.35p 3.29%
XP Power Ltd. (DI) (XPP) 2,890.00p 3.21%
SSP Group (SSPG) 244.50p 2.82%
Virgin Money UK (VMUK) 135.85p 2.64%
Darktrace (DARK) 299.70p 2.43%
Hipgnosis Songs Fund Limited NPV (SONG) 111.00p 2.40%
Investec (INVP) 439.80p 2.37%
Centamin (DI) (CEY) 79.06p 2.36%

FTSE 250 - Fallers

Chrysalis Investments Limited NPV (CHRY) 90.00p -6.44%
Pets at Home Group (PETS) 292.00p -5.81%
Grafton Group Ut (CDI) (GFTU) 738.60p -5.53%
Dunelm Group (DNLM) 784.50p -5.48%
Ashmore Group (ASHM) 210.80p -3.74%
Vivo Energy (VVO) 145.40p -2.02%
Moonpig Group (MOON) 225.00p -1.75%
Micro Focus International (MCRO) 274.40p -1.40%
Jupiter Fund Management (JUP) 140.00p -1.34%
Vietnam Enterprise Investments (DI) (VEIL) 666.00p -1.33%

Disclaimer & Declaration of Interest

The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

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