London open: Stocks edge higher ahead of spending review

(Sharecast News) - London stocks edged higher in early trade on Wednesday as investors eyed Chancellor Rishi Sunak's spending review.
At 0840 GMT, the FTSE 100 was up 0.3% at 6,449.45p.

Overnight, the Dow closed above 30,000 for the first time, lifted by the prospect of a smooth transition to power by US President-elect Joe Biden and reports that former Federal Reserve Chair Janet Yellen is his top pick for Treasury Secretary. The S&P 500 also hit a fresh record high.

CMC Markets analyst Michael Hewson said: "Another record day for US stocks and a fresh 29-year high for the Nikkei225 has seen markets here in Europe open modestly higher this morning as momentum begins to show signs of slowing ahead of tomorrow's US Thanksgiving holiday.

"Over the past week or so the outlook for stocks, as well as the global economy, has brightened considerably as the prospect of a number of vaccines, along with, what looks like a relatively seamless transition of power in the US has prompted a bout of optimism that a pathway to recovery is opening up.

"Despite this brighter outlook, the path there continues to look long and arduous. French President Emmanuel Macron announced a modest relaxation to France's lockdown, however there was huge disappointment for bars and restaurants who were told they would have to remain closed until 20th January. In the UK, the government here also outlined a three-tier system of rules in the lead-up to Christmas which in turn received some criticism from various parts of the hospitality sector."

All eyes will be on Sunak's spending review later in the day.

"The Chancellor is already on track to spend over £400bn this fiscal year alone in tackling the pandemic," said Hewson. "Today he is expected to outline further measures to support the economy spend £4.3bn on supporting the newly unemployed back to work. The primary focus is likely to be on infrastructure, particularly in the hardest hit areas with a focus on green initiatives like battery factories, wind farms."

In equity markets, GKN owner Melrose rallied after saying it was trading at the top of board expectations, although it also struck a cautious note about the outlook. Aerospace sales fell 37% in the four months to the end of October but the automotive and metallurgy business picked up with an improving trend. Nortek Air Management revenue rose 13%.

United Utilities rose as it lifted its interim dividend despite posting a drop in profit, while animal genetics company Genus gained after saying it is likely to perform ahead of its previous profit growth expectations for the financial year 2021.

Industrial flow control equipment maker Rotork was also in the black as it said 2020 adjusted operating profit is set to be at or slightly above, the top end of the range of current market expectations.

On the downside, defence company Babcock International slid as it reported a decline in full-year profit and revenue as costs rose due to the Covid-19 pandemic.

Virgin Money was also weaker after it posted a slump in underlying profits after taking a £501m impairment charge as Britain's economy braces for the coronavirus crisis fallout.

Media platform Future lost ground after announcing it has agreed to buy GoCo in a deal that values the GoCompare owner at 136p a share, and reporting a jump in full-year profit and revenue.

Market Movers

FTSE 100 (UKX) 6,449.45 0.27%
FTSE 250 (MCX) 19,710.69 -0.40%
techMARK (TASX) 3,966.71 0.11%

FTSE 100 - Risers

United Utilities Group (UU.) 938.60p 4.73%
Melrose Industries (MRO) 170.10p 4.26%
Pennon Group (PNN) 994.80p 3.17%
Ocado Group (OCDO) 2,189.00p 2.15%
Severn Trent (SVT) 2,496.00p 2.13%
Bunzl (BNZL) 2,357.00p 1.90%
Experian (EXPN) 2,777.00p 1.83%
Johnson Matthey (JMAT) 2,301.00p 1.77%
Hikma Pharmaceuticals (HIK) 2,647.00p 1.77%
Fresnillo (FRES) 1,066.00p 1.72%

FTSE 100 - Fallers

British Land Company (BLND) 476.50p -2.62%
Land Securities Group (LAND) 697.70p -2.41%
Prudential (PRU) 1,227.00p -2.39%
Legal & General Group (LGEN) 266.30p -2.06%
M&G (MNG) 196.95p -1.97%
Next (NXT) 6,686.00p -1.79%
Aviva (AV.) 332.60p -1.54%
Barclays (BARC) 147.94p -1.50%
International Consolidated Airlines Group SA (CDI) (IAG) 167.95p -1.50%
Informa (INF) 548.60p -1.40%

FTSE 250 - Risers

Genus (GNS) 4,086.00p 4.23%
Rotork (ROR) 330.60p 3.96%
Hochschild Mining (HOC) 218.00p 3.61%
Drax Group (DRX) 345.20p 3.29%
Calisen (CLSN) 196.95p 2.69%
Scottish Inv Trust (SCIN) 725.00p 2.11%
Centamin (DI) (CEY) 108.65p 1.97%
Rathbone Brothers (RAT) 1,564.00p 1.96%
Telecom Plus (TEP) 1,488.00p 1.78%
TP ICAP (TCAP) 220.60p 1.75%

FTSE 250 - Fallers

Virgin Money UK (VMUK) 130.60p -11.16%
Babcock International Group (BAB) 317.40p -10.57%
TUI AG Reg Shs (DI) (TUI) 520.00p -4.87%
Fisher (James) & Sons (FSJ) 962.00p -3.80%
Network International Holdings (NETW) 290.00p -3.27%
Micro Focus International (MCRO) 360.50p -3.01%
Wood Group (John) (WG.) 306.50p -3.01%
AJ Bell (AJB) 393.50p -2.84%
AO World (AO.) 368.00p -2.65%
Dixons Carphone (DC.) 114.50p -2.64%