LONDON MARKET OPEN: Strong start to new week as miners lift FTSE 100

(Alliance News) - Stock prices in London opened higher on Tuesday following the Easter break, with the FTSE 100 supported by miners and housebuilders.

The FTSE 100 index opened up 30.89 points, 0.4%, at 7,772.45. The FTSE 250 was up 153.92 points, 0.8%, at 18,950.95, and the AIM All-Share was up 5.03 points, 0.6%, at 816.18.

The Cboe UK 100 was up 0.4% at 777.50, the Cboe UK 250 was up 0.9% at 16,530.39, and the Cboe Small Companies was down 0.2% at 13,194.90.

In European equities, the CAC 40 in Paris was up 0.8%, while the DAX 40 in Frankfurt was up 0.7%

Financial markets in London, Frankfurt and Paris were closed for Good Friday and Easter Monday. Markets in New York closed on Friday, but reopened on Monday.

On Monday, Wall Street ended mixed, with the Dow Jones Industrial Average closing up 0.3%, the S&P 500 rising 0.1% and the Nasdaq Composite ending marginally lower.

"US markets recovered early losses, with the main indices landing flat to positive after a choppy session which followed the long Easter weekend. It was the first opportunity that investors had to react to the non-farm payrolls figure, which was released on Good Friday," said interactive investor's Richard Hunter.

US job gains eased in March for a second straight month, government data showed Friday, adding to signs that the world's largest economy is cooling as policymakers push on in their fight against inflation.

The country added 236,000 jobs last month, slightly less than expected, while the unemployment rate inched down to 3.5% from 3.6%, the Labor Department said.

But wage growth was solid, with average hourly earnings rising 0.3% to USD33.18, according to the latest data. Compared with a year ago, wages increased 4.2%.

The reading left "consensus unchanged that the Federal Reserve would persist with its hiking policy for now and raise rates by 0.25% at the upcoming May meeting", ii's Hunter said.

"This week promises to uncover further clues with a busy economic and corporate calendar in sight. [US] consumer price and producer price index data will provide fresh updates on the Fed’s battle against inflation, and at the end of the week the first quarter earnings season begins in earnest as three of the larger banks report results," ii's Hunter continued.

There will be US CPI on Wednesday, followed by PPI on Thursday. On Friday, Wells Fargo, JPMorgan and Citigroup report their quarterly earnings, along with asset manager BlackRock.

In UK economic news, retail sales growth remained stable in March, according to data from British Retail Consortium-KPMG on Tuesday.

Total UK retail sales increased 5.1% in March against the previous year, slowing from an increase of 5.2% in February. This was above the three-month average growth of 4.8%, however, as well as the 12-month average of 2.6%.

BRC Chief Executive Helen Dickinson said: "While the wettest March in over forty years dampened sales growth for fashion, gardening and DIY products, Mother's Day brighten up sales for the month."

"With consumer confidence edging up and big events on the horizon such as the King's Coronation, retailers have reason for a spring in their step. However, extensive cost pressures on business remains, and government must ensure it minimises incoming regulatory burdens."

Sterling was quoted at USD1.2417 early Tuesday, lower than USD1.2436 at the London equities close on Thursday. The euro traded at USD1.0882, lower than USD1.0919.

The yen weakened, with the dollar quoted at JPY133.51, firmer versus JPY131.72.

Japan's new central bank chief said Monday no major rate hikes were on the horizon, and that a long-standing loose monetary policy remained "appropriate".

Kazuo Ueda took over this month from Haruhiko Kuroda, the bank's longest-serving governor and architect of a monetary policy intended to help boost the world's third-largest economy.

In Asia on Tuesday, the Nikkei 225 index closed up 1.1%. The S&P/ASX 200 in Sydney rose 1.3%. In China, the Shanghai Composite was down 0.1%, while the Hang Seng index in Hong Kong was up 0.3%.

China's consumer price inflation fell below 1% in March, official figures showed, a sign of weak demand as the world's second-largest economy tries to recover from its pandemic-driven slump.

The March consumer price index – the main gauge of inflation – came in at 0.7%, down from the 1% seen a month earlier, according to the country's National Bureau of Statistics.

Beijing is targeting an average inflation rate of 3% for 2023, which is still far below the current rates of many developed economies.

In the FTSE 100, miners were among the top performers with Glencore up 3.7%, Rio Tinto rising 3.1% and Anglo American up 2.4%.

Gold was quoted at USD1,999.12 an ounce early Tuesday, lower than USD2,009.21 on Thursday.

Housebuilders were also performing well. Persimmon rose 2.1%, as Barclays raised the stock to 'equal weight' from 'underweight'. Barratt and Taylor Wimpey rose 1.5% and 1.3% respectively, as the investment bank lifted its price target for the stocks.

Brent oil fetched USD84.89 a barrel early Tuesday, little changed from USD84.88 late Friday.

Harbour Energy said it has agreed with BP to develop the Viking carbon capture & storage transportation and storage project.

Harbour will continue as operator, with a 60% interest, and BP will acquire the remaining 40% non-operated stake. The arrangement brings together "two of the most experienced operators in the North Sea", the firms said.

The news follows the UK government's decision to launch track 2 of its CCS cluster sequencing process, and "its recognition that Viking CCS is one of two leading transport and storage system contenders for this process", Harbour said.

Subject to the outcome of the track 2 cluster sequencing process, Harbour said a final investment decision is expected in 2024.

"The project could be operational as early as 2027 and potentially storing up to 10 million tonnes of CO2 per year by 2030," it added.

BP rose 1.3%, and Harbour added 0.9%.

Fellow oil major Shell was up 1.7%, despite news of potential legal action against the firm.

Kazakhstan said it had begun international arbitration court proceedings against energy majors including ExxonMobil and Shell over USD16.5 billion in costs deducted from the revenues from two oilfields.

The vast Kashagan field, which lies in the north of the Caspian Sea, is run by the North Caspian Operating Company consortium made up of KazMunayGaz, Eni, ExxonMobil, Shell, TotalEnergies, China National Petroleum Corporation and Inpex.

Eni, Shell and KazMunayGaz also operate the Karachaganak field in western Kazakhstan, along with Chevron and Lukoil.

The operating companies have been able to deduct certain costs from revenues before dividing it with the government under production sharing agreements.

AIM-listed Spectral MD set to depart for the Nasdaq.

The AI medical diagnostics firm has agreed a business combination with Nasdaq-listed special purpose acquisition company Rosecliff Acquisition. It expects to receive gross proceeds in excess of USD20 million, with the transaction valuing the firm at USD170 million, or 101p a share.

It expects the proposed combination to complete in the third quarter of the year, subject to shareholder approval. As part of the deal, Spectral intends to cancel its AIM listing.

"The Nasdaq listing will ensure we are well positioned to capitalize on US federal procurement contracts, our planned FDA and CE mark submissions in 2023 and 2024, and our commercialization roadmap for burn, DFU, 3-D wound size measurement, as well as support the advancement of additional pipeline clinical applications," said Chief Executive Wensheng Fen.

Shares in Spectral were up 79% to 50.00p each.

Still to come on Tuesday's economic calendar, there's eurozone retail trade figures at 1000 BST.

By Elizabeth Winter, Alliance News senior markets reporter

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