LONDON MARKET OPEN: Stocks higher; Reckitt gains on unit sale report

(Alliance News) - Stock prices in London opened higher on Monday ahead of a key week for UK company earnings, while Reckitt Benckiser inched up after a report that it is considering options for its infant nutrition business.

The FTSE 100 index was up 9.44 points, or 0.1%, at 7,525.84 early Monday. The mid-cap FTSE 250 index was up 39.96 points, or 0.2%, at 21,752.00. The AIM All-Share index was up 2.48 points, 0.2%, at 1,088.49.

The Cboe UK 100 index was up 0.2% at 747.23. The Cboe 250 was up 0.5% at 19,5023.76, and the Cboe Small Companies was 0.1% higher at 15,334.92.

On the continent, the CAC 40 stock index in Paris was up 0.7% and the DAX 40 in Frankfurt was 0.8% higher.

The UK blue-chip index was underperforming European peers on Monday morning as oil prices gave back some of their recent strong gains.

"The FTSE 100 is maintaining its contrarian stance in terms of performance, as it continues to benefit inter alia from the strength of an oil price which has now risen by 20% in the year to date. In addition, the mature, cyclical and to some extent defensive nature of its components have also attracted renewed interest from investors given the turmoil being seen elsewhere," said interactive investor's Richard Hunter.

"While volatility is most likely to continue at least until the Federal Reserve announcement in March, investors will continue to search for alternative investment destinations until some of the global economic tightening concerns settle...The FTSE 100 could continue to be on the radar for such investors," Hunter added.

Oil majors BP and Shell were down 0.9% and 0.1% respectively, tracking spot oil prices lower.

Brent oil was retreating from a seven-year high, quoted at USD92.56 a barrel on Monday morning, down from USD93.35 late Friday.

BP will report annual results on Tuesday.

Also in the FTSE 100, Scottish Mortgage Investment Trust was up 1.6%, tracking a rise in US tech stocks in which it holds shares, such as Amazon. The e-commerce company closed up 14% on Friday after it reported strong fourth-quarter earnings. The trust holds a 2.4% stake in Amazon.

Reckitt Benckiser was up 0.8% after Bloomberg reported on Friday that the hygiene and household goods firm was weighing options for its infant nutrition unit, including a potential sale.

Citing people familiar with the matter, Bloomberg said Reckitt is reviewing the business globally and has been informally gauging buyer interest in the operations. The business could attract offers from private equity firms or rival baby food makers, the people said, asking not to be identified because the information is private.

Conversely, Taylor Wimpey was down 1.0%. The housebuilder promoted Jennie Daly to chief executive officer, effective from the conclusion of the annual general meeting on April 26 to replace the outgoing Pete Redfern.

Daly is currently operations director of Taylor Wimpey and a member of the board of directors. She joined Taylor Wimpey in 2014 from Redrow, where she was managing director of its Harrow Estates business.

In Asia on Monday, the Japanese Nikkei 225 index closed down 0.7%. In China, the Shanghai Composite ended up 2.0%, while the Hang Seng index in Hong Kong finished down 0.2%. Markets in mainland China reopened after the Lunar New Year holiday. The S&P/ASX 200 in Sydney closed down 0.1%.

China's service sector saw growth slow at the start of 2022 due to an uptick in Covid-19 cases across the globe, survey data from Caixin showed.

The business activity index fell to 51.4 points in January from 53.1 in December. As the reading remained above the no-change mark of 50.0, it signalled the sector continued to expand in January, but at a slower pace than December.

Firms highlighted that the pandemic and subsequent measures to contain the virus weighed on growth. New export orders fell for the first time in four months, and at the quickest pace since October 2020, as businesses pointed towards damped international demand due to Covid cases overseas.

The pound was quoted at USD1.3537 early Monday, little changed from USD1.3535 at the London equities close Friday.

The euro was priced at USD1.1435, down from USD1.1443. Against the Japanese yen, the dollar was trading at JPY115.12, lower against JPY115.25.

Gold stood at USD1,812.53 an ounce, higher against USD1,804.75 late Friday.

Earnings season in the UK begins in earnest this week, with annual results due from a slew of blue-chip names. In addition to BP, online grocer Ocado reports on Tuesday and drugmaker GlaxoSmithKline on Wednesday. Data analytics firm RELX and consumer goods maker Unilever follow on Thursday, with the week rounded off by British American Tobacco on Friday.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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