London open: FTSE boosted by Fed rate cut hopes

(Sharecast News) - London stocks rose in early trade on Friday, taking their cue from positive US and Asian sessions amid renewed hopes of more monetary easing from the US Federal Reserve.
At 0830 BST, the FTSE 100 was up 0.5% at 7,533.36, while the pound was down 0.2% against the dollar at 1.2521 and flat versus the euro at 1.1121.

Stocks in the US and Asia were lifted by rising expectations of a rate cut from the Fed, after New York Fed President John Williams said in a speech that policymakers could not wait for economic disaster to strike before adding stimulus. In addition, Fed Vice Chairman Clarida said the central bank needs to act quickly when the need for stimulus arises.

However, a spokesperson for the Fed was quick to clarify Williams' comments. Speaking to CNBC, he said: "This was an academic speech on 20 years of research. It was not about potential policy actions at the upcoming FOMC meeting."

Han Tan, market analyst at FXTM, said: "The dovish commentary by Fed officials underscored expectations that the US central bank will lower interest rates by a larger quantum at the Federal Open Market Committee meeting later this month. At the time of writing, markets now expect a 43.5% of a 50-basis point cut at the July 30-31 FOMC meeting, as seen in the Fed funds futures.

"Despite the better-than-expected June non-farm payrolls, retail sales, and factory output data, the Fed is expected to press ahead with at least a 25-basis point interest rate cut this month. Given that US inflation remains muted while global uncertainties continue to prevail, lower US interest rates should help ensure that US economic growth momentum remains steadfast."

In London equity markets, miners were on the rise as copper prices advanced, with Antofagasta and Anglo American both higher.

Broadcaster ITV also gained ground after it and the BBC announced details of their new joint venture subscription service, BritBox.

Emergency household repairs business Homeserve was in the green as it said it was selling its 49% shareholding in its Italian associate, Assistenza Casa, to its partner Edison due to "limited opportunities" for customer growth.

Acacia Mining shares surged as it agreed to be bought by Barrick Gold in a deal that values the UK gold miner at about £951m and concludes two months of fractious talks between the companies.

Merchant bank Close Brothers was weaker as it said it has continued to deliver a "solid" performance amid "mixed" trading conditions, with loan book growth in its banking division but lower trading volumes in its securities arm.

Advertising giant WPP was under the cosh after French peer Publicis cut its revenue target for the year.

Paper and packaging group DS Smith retreated as the Competition and Markets Authority said Liqui-Box's proposed takeover of its rigid and flexible packaging business could leave food and drink suppliers worse off. The two companies will now need to address the CMA's concerns or the deal will be referred for an in-depth investigation.

Paper companies were weaker generally, with Smurfit Kappa and Mondi also down after Finnish paper manufacturer Stora Enso reported a decline in second-quarter profits amid weaker demand.

In broker note action, Superdry and Ted Baker were initiated at 'overweight' and 'equalweight', respectively, by Morgan Stanley, while Asos was cut to 'equalweight' at Barclays.

EasyJet was boosted to 'hold' at HSBC.



Market Movers

FTSE 100 (UKX) 7,533.36 0.54%
FTSE 250 (MCX) 19,575.76 0.21%
techMARK (TASX) 3,673.95 0.49%

FTSE 100 - Risers

Antofagasta (ANTO) 921.20p 2.52%
Fresnillo (FRES) 830.20p 2.07%
British American Tobacco (BATS) 3,154.50p 1.61%
ITV (ITV) 110.90p 1.37%
Anglo American (AAL) 2,213.50p 1.33%
Just Eat (JE.) 624.29p 1.31%
Scottish Mortgage Inv Trust (SMT) 554.09p 1.20%
Vodafone Group (VOD) 128.40p 1.18%
JD Sports Fashion (JD.) 618.70p 1.16%
Halma (HLMA) 2,009.00p 1.16%

FTSE 100 - Fallers

Smurfit Kappa Group (SKG) 2,492.00p -2.66%
WPP (WPP) 926.80p -1.17%
Mondi (MNDI) 1,758.50p -1.15%
Smith (DS) (SMDS) 360.20p -0.88%
Carnival (CCL) 3,500.00p -0.17%
TUI AG Reg Shs (DI) (TUI) 763.60p -0.16%
Berkeley Group Holdings (The) (BKG) 3,823.00p -0.16%
Persimmon (PSN) 1,975.50p -0.13%
Morrison (Wm) Supermarkets (MRW) 208.20p -0.10%
Kingfisher (KGF) 221.10p -0.09%

FTSE 250 - Risers

Hochschild Mining (HOC) 213.20p 3.90%
Centamin (DI) (CEY) 118.95p 2.99%
Renishaw (RSW) 3,826.00p 2.96%
Galliford Try (GFRD) 644.50p 2.30%
Kaz Minerals (KAZ) 558.19p 2.23%
Aston Martin Lagonda Global Holdings (AML) 981.76p 1.95%
Daejan Holdings (DJAN) 5,680.00p 1.79%
Spirent Communications (SPT) 165.00p 1.60%
Polymetal International (POLY) 1,003.92p 1.57%
Sirius Minerals (SXX) 16.11p 1.52%

FTSE 250 - Fallers

Vivo Energy (VVO) 118.40p -3.74%
Charter Court Financial Services Group (CCFS) 290.00p -2.03%
CLS Holdings (CLI) 218.50p -1.35%
McCarthy & Stone (MCS) 137.10p -1.15%
FirstGroup (FGP) 107.30p -1.11%
Cobham (COB) 116.40p -1.06%
Close Brothers Group (CBG) 1,436.00p -1.03%
IntegraFin Holding (IHP) 379.50p -0.91%
National Express Group (NEX) 418.20p -0.76%
Intu Properties (INTU) 80.54p -0.59%