LONDON MARKET OPEN: Stocks Up As Fed, Trade Optimism Lifts Sentiment

LONDON (Alliance News) - Stock prices in London opened higher on Monday lifted by comments by the US Federal Reserve chair late last week, as a delegation of US officials heads to Beijing for two days of trade talks with China providing a further boost. However, the opening gains in London fell short of the lead provided by Asia overnight and Wall Street on Friday, as continued political divisions in UK over Brexit weighed on sentiment in London. The pound was higher, quoted at USD1.2754 against USD1.2723 late Friday.The FTSE 100 was up 15.08 points, or 0.2%, at 6,852.50, while the FTSE 250 was 132.98 points higher, 0.7%, at 17,928.86. The AIM All-Share was up 0.6% at 879.91.The Cboe UK 100 was up 0.2% at 11,629.75, while the Cboe UK 250 was 0.4% higher at 15.45 and the Cboe UK Small Companies flat at 10,929.23."Investors appear to be taking their cue both from Jerome Powell, who insisted last week that the Federal Reserve would be 'patient' about rate rises and that the central bank is 'listening sensitively' to the markets, and the impending trade talks between the US and China in Beijing this Monday," said Spreadex analyst Connor Campbell.In mainland Europe, the CAC 40 in Paris was up 0.1%, while the DAX 30 in Frankfurt was up 0.2%.The Japanese Nikkei 225 index closed up 2.4%. In China, the Shanghai Composite closed up 0.7%, while the Hang Seng index in Hong Kong closed up 0.8%.A US trade delegation is set to arrive in Beijing on Monday for talks with Chinese counterparts about how to solve their months-long trade spat. The two-day visit follows a "ceasefire" in the trade war reached by US President Donald Trump and Chinese President Xi Jinping in December.Wall Street ended sharply higher on Friday, with the Dow Jones Industrial Average up 3.3%, S&P 500 up 3.4% and Nasdaq Composite up 4.3%.Federal Reserve Chairman Jerome Powell noted the central bank "will be patient" with monetary policy as it watches the economy evolve. Powell stressed that monetary policy is not on a "preset path" after the Fed raised interest rates four times in 2018 and forecast two rate hikes in the new year.On the London Stock Exchange early Monday, Fresnillo was the best blue-chip performer, up 2.8%, tracking spot gold prices higher.The precious metal was quoted at USD1,292.10 an ounce early Monday against USD1,285.80 late Friday, as the dollar weakened following Powell's comments. "The reaction in the dollar was interesting on Friday, with the currency rallying strongly in response to the jobs report before reversing course following Powell's comments. Given that markets had completely priced out a hike this year prior to the release, this isn't necessarily a surprise but it could keep the pressure on the greenback in the near future," said Oanda senior market analyst Craig Erlam.At the other end of the large cap index, Centrica was the worst performer, down 4.2% after Jefferies downgraded the energy supplier to Hold from Buy.InterContinental Hotels Group was down 2.0% after Morgan Stanley cut the hotel operator to Underweight from Equal Weight.HSBC Holdings was down 1.8% after Citigroup lowered its rating on the lender to Sell from Neutral. In the FTSE 250, Dunelm Group was the best performer, up 12% after the homewares retailer reported positive Christmas trading figures. Dunelm reported total revenue growth, for the 26 weeks to December 29, of 1.2% on the prior year, with like-for-like sales up 6.9%.The 13 weeks making up the second quarter of Dunelm's financial year saw total sales up 2.0% with like-for-likes up 9.0%, which the company described as a "pleasing result" building on the positive trading experienced in the first quarter.In the second quarter, Dunelm stores' revenue was up 3.8%, while online grew 36% year-on-year.The retailer now expects its interim pretax profit to be around GBP70.0 million, up 17% from GBP60.0 million a year ago.ContourGlobal was up 6.3% after the power generation company said it agreed to acquire Mexican chemical manufacturer Alpek's portfolio of two natural gas-fired combined heat and power plants, together with development rights and permits for a third plant, for USD724 million in cash.In domestic political news, Theresa May will intensify efforts to win over her Brexit critics and seek fresh guarantees from Brussels ahead of next week's crunch vote on her deal.The UK prime minister acknowledged she was "still working on" getting further assurances from the EU to address concerns about the backstop measure aimed at preventing a hard border with Ireland.But as MPs returned to Westminster after the Christmas break she was warned that the attitudes of Tory Brexiteers had hardened, with Boris Johnson stating that a no-deal Brexit was closest to what people voted for in the referendum."The domestic focus will shift back to UK politics with parliament returning from recess. At present, the date of the 'meaningful vote' is still unknown, but media reports suggest the 15 or 16 January are the most likely days," noted analysts at Lloyds, meaning Tuesday or Wednesday next week.