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London open: Stocks in the black as deal news provides a boost; inflation eyed
London stocks rose in early trade on Tuesday, with more deal news providing a boost as Fenner agreed to be bought by Michelin, while traders looked ahead to key inflation readings.
At 0830 GMT, the FTSE 100 was up 0.4% to 7,071.97, while the pound was up 0.2% against the euro and the dollar at 1.1387 and 1.4051, respectively, still underpinned by news the day earlier that the UK and the EU had agreed the terms of a Brexit transition period.
On the economic calendar, the consumer price index, retail price index and producer price index are all due at 0930 GMT. Analysts are expecting the headline CPI figure to fall to 2.8% month-on-month.
Spreadex analyst Connor Campbell said: "If accurate, that would be the first time since last August that inflation has been below that landmark 3.0% level. And while 2.8% is undoubtedly still high, the big question is over how much hawkish clout such a figure would have, especially with a Bank of England meeting on Thursday."
In corporate news, housebuilder Bellway rose after saying it was on track to build more than 10,000 homes in a year for the first time as half year pre-tax profits rose 16.6% to £288.7m.
Engineering group Fenner surged after agreeing to be bought by French tyre manufacturer Michelin in a deal worth around £1.3bn. Under the terms of the transaction, Fenner shareholders will receive 610p in cash per share, which is a premium of around 31% to the closing price of 467p on 16 March.
Glencore was higher after it agreed to buy Rio Tinto's 82% interest in the Hail Creek coal mine and adjacent coal resources, as well as its 71.2% interest in the Valeria coal resource in central Queensland for $1.7bn. Rio shares were also positive.
Imperial Brands edged up after announcing the disposal of its other tobacco products business in the US as it simplifies its portfolio and looks to sharpen its focus on driving revenue growth from its core US tobacco brands.
Industrial property investor Hansteen Holdings gained as it said it would return £145m in cash to shareholders and posted an 87% jump in full-year IFRS profit to £204.3m.
Wood Group ticked up after saying it expects to see modest earnings growth in 2018 as it benefits from a tentative recovery in oil and gas markets and cost savings from the acquisition of Amec Foster Wheeler.
Engineer GKN - which is currently fending off a hostile bid from Melrose Industries - was a little weaker as it said the turnaround specialist's claims about its pension schemes were "misleading".
Ocado was on the back foot as it said first-quarter revenues fell from the preceding quarter but improved compared to the start of last year as heavy snow across Britain disrupted the final week.
Online gaming specialist 888 Holdings retreated despite reporting full-year earnings ahead of expectations, while plastic pipe-maker Polypipe fell after it said that a strong UK performance against a challenging backdrop helped it to record a 3.9% rise in full year pre-tax profits to £55.6m.
In broker note action, Gem Diamonds and Petra Diamonds were lifted to 'buy' at Citi, while Micro Focus was upgraded to 'neutral' at Credit Suisse and IMI was boosted to 'neutral' at UBS.
National Grid was initiated at 'buy' at Societe Generale, while Fenner was lifted to 'hold' at Investec.
Barclays was downgraded to 'hold' at Investec.
Market Movers
FTSE 100 (UKX) 7,071.97 0.41%
FTSE 250 (MCX) 19,719.89 0.13%
techMARK (TASX) 3,249.96 0.23%
FTSE 100 - Risers
ITV (ITV) 148.05p 1.72%
WPP (WPP) 1,190.00p 1.62%
Evraz (EVR) 416.30p 1.22%
Barratt Developments (BDEV) 533.20p 1.14%
Old Mutual (OML) 245.40p 1.07%
Rio Tinto (RIO) 3,650.00p 1.07%
Persimmon (PSN) 2,558.00p 1.03%
BHP Billiton (BLT) 1,401.60p 0.94%
London Stock Exchange Group (LSE) 3,995.00p 0.91%
Prudential (PRU) 1,895.50p 0.90%
FTSE 100 - Fallers
Reckitt Benckiser Group (RB.) 5,622.00p -0.97%
Just Eat (JE.) 731.00p -0.63%
Centrica (CNA) 135.05p -0.48%
Micro Focus International (MCRO) 1,006.50p -0.45%
GKN (GKN) 423.40p -0.19%
National Grid (NG.) 764.60p -0.17%
Unilever (ULVR) 3,772.50p -0.09%
CRH (CRH) 2,429.00p -0.08%
Barclays (BARC) 217.00p -0.00%
Compass Group (CPG) 1,532.50p 0.00%
FTSE 250 - Risers
Fenner (FENR) 619.50p 26.27%
Charter Court Financial Services Group (CCFS) 320.47p 3.88%
PZ Cussons (PZC) 232.40p 3.47%
Bellway (BWY) 3,114.00p 2.10%
IMI (IMI) 1,128.00p 1.53%
Galliford Try (GFRD) 986.50p 1.44%
John Laing Group (JLG) 257.60p 1.42%
Polar Capital Technology Trust (PCT) 1,150.00p 1.41%
IP Group (IPO) 103.40p 1.37%
Kaz Minerals (KAZ) 922.20p 1.30%
FTSE 250 - Fallers
Ocado Group (OCDO) 553.80p -3.22%
Aveva Group (AVV) 1,912.00p -1.95%
Senior (SNR) 297.00p -1.92%
Capita (CPI) 156.00p -1.70%
GVC Holdings (GVC) 941.40p -1.68%
888 Holdings (888) 291.00p -1.62%
Entertainment One Limited (ETO) 287.60p -1.44%
Ladbrokes Coral Group (LCL) 172.95p -1.37%
Hunting (HTG) 687.50p -1.29%
Brewin Dolphin Holdings (BRW) 335.20p -1.12%