London midday: Stocks extend gains ahead of US inflation print

Sharecast - The FTSE 100 was up 1.1% at 7,361.04.

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown (LON:HRGV), said: "US annual inflation is expected to drop back to 3.1% for June, which would mark a twelfth consecutive decline. Some of the decline can be taken as a reaction from the very high-base starting point, following food and energy price spikes at the same time last year. More important will be the core inflation number, which is expected to be running at around 5%.

"While the direction of travel is very much the right one, bringing core inflation closer to earth remains the main mission. That’s increasingly likely to culminate in further interest rate hikes from the Federal Reserve, despite a brief cooling in policy seen recently. The expected inflation slowdown, coupled with the UK’s banks passing stress testing, has seen the FTSE 100 open up 27 points. Sentiment across Europe is more upbeat too."

The US consumer price index for June is due out at 1330 BST.

In equity markets, banks rallied after the Bank of England said that eight major institutions had passed annual capital stress tests and were well positioned to support households and businesses through a period of rising interest rates. The lenders were Barclays (LON:BARC), Lloyds, HSBC (LON:HSBA), NatWest (LON:NWG), Santander (BME:SAN) UK, Standard Chartered (LON:STAN), Nationwide Building Society (LON:NBS) and Virgin Money (LON:VMUK).

Lund-Yates said: "The tests come as a relief during a time that’s been marred by anxiety about regional banking failures in the US as interest rates have shot up in many major economies. A combination of strong balance sheets, healthy asset-classes and a stricter regulatory environment mean the UK’s financial giants also have more room to help customers if things get tougher, including changing the terms of loans if needed."

Shares in Virgin Money were particularly strong, after it said it plans to resume its share buyback programme during the year and continues to expect a 30% full-year dividend payout level.

Miners were also on the front foot as copper prices rose, with Anglo American (LON:AAL), Glencore (LON:GLEN) and Rio Tinto (LON:RIO) all up.

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Pub chain JD Wetherspoon surged as it held annual profit guidance as sales in the last 10 weeks of its final quarter rose 11%.

Building materials distributor and DIY retailer Grafton gained after it held annual guidance as first-half revenues rose 3.2% despite the cost-of-living crisis hitting volumes.

Recruiter PageGroup pushed up despite posting a decline in second-quarter profit amid ongoing challenging trading conditions.

Babcock advanced after saying it was awarded a £50m contract by the UK Ministry of Defence to support urgent operational requirements for Ukraine’s military land assets.

Educational publisher Pearson (LON:PSON) got a boost after Citi said it was opening a "positive catalyst watch" on the shares as it thinks the first-half results at the end of July will act as a positive catalyst.

On the downside, BA owner IAG was knocked lower by a downgrade to ‘hold’ from ‘buy’ at Deutsche Bank (ETR:DBKGn), while Bunzl (LON:BNZL) was under the cosh after a downgrade to ‘underperform’ from ‘sector perform’ by RBC Capital Markets.

Market Movers

FTSE 100 (UKX) 7,361.04 1.08%

FTSE 250 (MCX) 18,275.26 0.75%

techMARK (TASX) 4,332.49 0.63%

FTSE 100 - Risers

Smurfit Kappa Group (CDI) (SKG) 2,766.00p 3.29%

Centrica (LON:CNA) 124.90p 2.97%

Lloyds Banking Group (LON:LLOY) 44.59p 2.81%

Anglo American (AAL) 2,288.00p 2.65%

BT Group (LON:BT.A) 125.45p 2.62%

Glencore (GLEN) 447.40p 2.37%

JD Sports Fashion (JD.) 147.90p 2.35%

Rio Tinto (RIO) 5,063.00p 2.34%

BP (LON:BP.) 470.60p 2.25%

Pearson (PSON) 837.40p 2.25%

FTSE 100 - Fallers

International Consolidated Airlines Group (LON:ICAG) SA (CDI) (IAG) 155.95p -2.68%

Bunzl (BNZL) 2,804.00p -2.44%

Endeavour Mining (EDV (LON:EDV)) 1,840.00p -0.43%

Diageo (LON:DGE) 3,278.00p -0.35%

Admiral Group (LON:ADML) (ADM) 2,037.00p -0.34%

Compass Group (LON:CPG) 2,067.00p -0.34%

Croda International (CRDA) 5,630.00p -0.14%

Flutter Entertainment (CDI) (FLTR) 15,415.00p -0.13%

Airtel Africa (AAF) 105.20p -0.09%

Sage Group (LON:SGE) 904.80p 0.02%

FTSE 250 - Risers

Wetherspoon (J.D.) (JDW) 727.50p 9.81%

Virgin Money UK (VMUK) 156.55p 7.19%

Currys (CURY) 54.35p 6.57%

Future (FUTR (LON:FUTR)) 799.50p 5.34%

International Distributions Services (IDS) 244.80p 4.39%

Grafton Group Ut (CDI) (GFTU) 790.40p 3.69%

Hays (LON:HAYS) (HAS) 103.50p 3.09%

Capita (CPI) 28.16p 3.00%

Schroder Oriental Income Fund Ltd. (SOI) 252.00p 2.86%

Bank of Georgia Group (LON:BGEO) 2,900.00p 2.84%

FTSE 250 - Fallers

Aston Martin Lagonda Global Holdings (AML) 323.40p -2.88%

Dr. Martens (DOCS) 121.60p -2.25%

Baltic Classifieds Group (BCG) 189.60p -1.96%

easyJet (LON:EZJ) 488.90p -1.23%

Bellevue Healthcare Trust (Red) (BBH) 148.80p -1.06%

Fidelity Emerging Markets Limited Ptg NPV (FEML) 572.10p -0.97%

Hammerson (HMSO) 24.98p -0.87%

Edinburgh Worldwide Inv Trust (EWI) 139.20p -0.85%

Sirius Real Estate Ltd. (SRE) 85.75p -0.69%

Playtech (LON:PTEC) 566.50p -0.61%

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