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(Alliance News) - The FTSE 100 opened near its all-time closing high on Monday morning, as better-than-expected UK GDP data and encouraging trading statements from some London-listed companies lifted lifted investor spirits.
"With British consumers flexing their spending muscle over the Christmas period and the country looking more likely to have escaped falling into recession in 2022, the waves of optimism have been lapping over the London market," said Susannah Street at Hargreaves Lansdown.
The FTSE 100 index opened up 15.25 points, or 0.2%, at 7,859.32. The FTSE 250 was up 40.75 points, 0.2%, at 19,993.59, while the AIM All-Share was down 1.79 points, 0.2%, at 862.81.
The Cboe UK 100 was up 0.1% at 786.52, the Cboe UK 250 was up 0.1% at 17,453.22, and the Cboe Small Companies was 0.1% at 13,793.62.
Trading is likely to be subdued on Monday, as New York will be closed for holiday.
The UK economy defied expectations and posted marginal growth in November, official figures on Friday showed.
UK gross domestic product grew by 0.1% month-on-month in November, slowing from October's unrevised growth of 0.5%. However, the economy had been expected to shrink by 0.2% in November, according to consensus cited by FXStreet.
GDP was helped by the start of the football World Cup, which boosted consumer-facing sectors, the Office for National Statistics explained.
The latest data from Rightmove on Monday pointed to further stability in the UK economy as, after two months of falls, the average UK asking price rose by 0.9% in January.
The average price of a property coming to the market for sale rose to GBP362,438 in January, up 0.9% from GBP359,137 in December. Rightmove said this was the biggest increase at this time of year since 2020.
"After the market's uncertain final few months of 2022, this familiar seasonality is a tentative sign of stability...It's still early days, but this is a more encouraging start to the year than many anticipated," Rightmove commented.
The pound was quoted at USD1.2208 early on Monday in London, flat compared to USD1.2209 at the close on Friday, giving up an earlier gain.
In London, J Sainsbury rose 0.4% after food delivery app Just Eat Takeaway announced a partnership with supermarket chain for grocery delivery in the UK.
The partnership will launch with more than 175 Sainsbury's stores by the end of February. As a result of the contact, Just Eat customer will have access to thousands of products, including Sainsbury's own brand products, for delivery.
Shares in Just Eat were down 2.2%.
In the FTSE 250, Rotork fell 2.1% as RBC cut the industrial flow control equipment maker to 'sector perform' from 'outperform'.
Primary care property investor Assura was down 1.7%. The firm said it had a portfolio of 607 properties with an annualised rent roll of GBP141.6 million as of the end of 2022.
However, Assura noted its net initial yield as of December 31 was 4.86%. It explained this represented a 7% reduction in its portfolio value which, at the end of 2022, stood at GBP2.7 billion.
Elsewhere in London, Petra Diamonds dropped 7.2%. The diamond miner reported its total diamond production fell by double-digits in the first half of its financial year.
In the six months that ended December 31, diamond production dropped by 21% to 1.4 million carats due to lower grades at the Cullinan mine, lower tonnes mined at the Finsch mine, and production suspensions at the Williamson and Koffiefontein mines.
Consequently, interim revenue totalled USD212.1 million, down 20% from USD264.7 million the year prior.
Looking forward, Petra Diamonds said it expects production at the Cullinan mine to hurt for the remainder of financial 2023 and financial 2023. Nonetheless, the firm said it was "cautiously optimistic" due to expected resilience of the luxury goods market alongside the relaxing of lockdown restrictions in China.
In European equities on Monday, the CAC 40 in Paris was up 0.1%, while the DAX 40 in Frankfurt was up 0.2%.
The euro stood at USD1.0818 early on Monday in London, flat against USD1.0820 at the close on Friday. Against the yen, the dollar was trading at JPY128.37, up compared to JPY127.85.
Ipek Ozkardeskaya at Swissquote Bank called the Japanese yen the "most exciting currencies of the moment".
She explained that last week the 10-year Japanese government bond yield, which is controlled by the Bank of Japan and which should not go above the 0.50% ceiling, went past that level, "hinting that the BoJ, which buys pretty much every 10-year JGB available in the market, does struggle to maintain control of bond yields."
As a result, Ozkardeskaya said, many traders expect the yield curve control policy to be scraped when the BoJ meets this week.
"If that's the case," Ozkardeskaya continued, "we will likely see the 10-year JGB yields go crazy, the yen further rally and the BoJ forced to readjust its rates as soon as possible."
In Asia on Monday, the Japanese Nikkei 225 index closed down 1.1%. In China, the Shanghai Composite closed up 1.0%, while the Hang Seng index in Hong Kong finished flat. The S&P/ASX 200 in Sydney closed up 0.8%.
China's economic growth for 2022 is expected to have been among its weakest in four decades after the twin crises of the pandemic and property woes, analysts said ahead of the release of official figures on Tuesday.
Ten experts interviewed by AFP forecast an average 2.7% year-on-year rise in gross domestic product for the world's second-largest economy, a sharp plunge from China's 2021 growth of more than 8%.
Beijing had set itself a growth target of around 5.5% for 2022 but this was undermined by the government's 'zero-Covid' policy, which put the brakes on manufacturing activity and consumption.
In the US on Friday, Wall Street ended higher, with the Dow Jones Industrial Average ending up 0.3%, the S&P 500 up 0.4% and the Nasdaq Composite up 0.7%. US financial markets are closed on Monday for the Martin Luther King Day holiday.
Brent oil was quoted at USD84.48 a barrel at early in London on Monday, down slightly from USD84.80 late Friday. Gold was quoted at USD1,911.45 an ounce, flat on USD1,911.40.
Still to come on Monday, FTSE 100 miner Rio Tinto will publish a trading statement at 2130 GMT.
By Heather Rydings, Alliance News senior economics reporter
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