(Alliance News) - Stock prices in London were higher at midday on Monday, as investors continue to digest last week's budget and react to PMI data from across Europe.
"Investors are bracing for a week of potential volatility, with the highly fractious US Presidential election in focus and key interest rate decisions looming," commented Hargreaves Lansdown's Susannah Streeter.
"For now, the FTSE 100 has shaken off nervousness and opened in the green, making fresh gains after Friday's recovery. Miners and banks were on the front foot in early trade and energy giants have helped offset wariness by gaining ground of the back of a stronger oil price."
Streeter also said: "While the budget might have set off a maelstrom of worries about the potential for hotter prices in the years ahead, the Bank of England still looks set to cut interest rates this week, given that inflation is currently below target...On the flip side, there is more potential for wage restraint given increased staffing costs - and it is stubborn pay growth which has stopped some policymakers from voting for rate cuts at previous meetings."
The FTSE 100 index was up 52.82 points, 0.7%, at 8,229.97. The FTSE 250 was up 78.24 points, 0.4%, at 20,557.98, and the AIM All-Share was up 0.01 points, flat, at 739.01.
The Cboe UK 100 was up 0.6% at 824.89, the Cboe UK 250 was up 0.4% at 18,152.31, and the Cboe Small Companies was up 0.5% at 16433.02.
"After a difficult few days, the FTSE 100 got off to a steady start on Monday as resources and China-linked stocks made progress," says AJ Bell's Russ Mould.
"Lawmakers in Beijing are sitting down this week to thrash out a big stimulus package to accelerate an economy which has been spluttering since the pandemic. Top of the agenda is addressing the issue of local government debt but also providing support to households...This fiscal package is essentially what the market has been waiting for, ever since China fired the starting gun on stimulus in September. As ever, the devil is likely to be in the detail."
On the FTSE250, Burberry gained 6.2%.
According to an article published on Sunday in the specialist luxury online publication Miss Tweed there is "growing industry chatter" that Italian luxury goods firm Moncler is mulling a bid for Burberry - albeit one motivated by Burberry's significant drop in value over the past year.
The report said that Bernard Arnault, the controlling shareholder of LVMH Moet Hennessy Louis Vuitton which has recently indirectly taken a stake in Moncler, supports the deal, which it said would likely involve a mix of cash and shares.
Chemring gained 0.8%.
The provider of technology, products and services to the aerospace, defence and security markets has won a 12-year contract with Diehl Defence for the supply of MCX energetic materials. The contract has an initial purchase order value of EUR231 million and covers five years beginning in late 2026.
Chemring also announced that its US subsidiary received a USD106 million order to deliver "critical components" for an undisclosed US missile programme.
On AIM, DP Poland was flat.
The Domino's pizza operator in Poland and Croatia said total system sales in Poland in the three months that ended September 30 were PLN63.7 million, or GBP12.3 million, rising 16% from PLN55.0 million last year.
"Since April 2024, we have experienced upward pressure on food costs, particularly dairy products", DP Poland said. "Despite this, we have continued to grow orders and market share without sacrificing store level profitability." The company remains "confident" in delivering full-year results in line with market expectations.
In European equities on Monday, the CAC 40 in Paris was up 0.3%, while the DAX 40 in Frankfurt was marginally higher.
The pound was quoted at USD1.2977 at midday on Monday in London, compared to USD1.2949 at the equities close on Friday. The euro stood at USD1.0910, higher against USD1.0847. Against the yen, the dollar was trading down at JPY151.60 compared to JPY152.03.
Stocks in New York were called higher. The Dow Jones Industrial Average was called up 0.1%, the S&P 500 index up 0.2%, and the Nasdaq Composite up 0.2%.
"The US election is upon us," notes Hargreaves Lansdown's Hal Cook, with "investors becoming increasingly focused on the implications of a Trump clean sweep – where he wins the presidency, and the Republicans win majorities in both the House of Representatives and the Senate.
"Expectations are that many of [Trump's] policies would be inflationary, potentially reducing the Federal Reserve's ability to cut interest rates."
However, Streeter writes: "Investors are reassessing Donald Trump’s chances of re-entering the White House, given polls which emerged over the weekend...But this election is still far too close to call, so considerable swings in prices are likely as the results ebb in."
Brent oil was quoted higher, at USD75.12 a barrel at midday on Monday from USD73.64 late Friday.
Gold was quoted lower at USD2,740.61 an ounce against USD2,741.43.
Still to come on Monday's economic calendar, there are factory orders and vehicle sales readings from the US.
By Emma Curzon, Alliance News reporter
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