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London stocks gain as investors eye earnings releases

written by Bella Palmer
stock-investors

Investors were also eyeing a statement to Parliament on Monday afternoon by Chancellor Rachel Reeves, who is expected to reveal cuts to plug a £20 billion black hole in public finances

London stocks gained in early trade on Monday as investors eyed a week packed with earnings releases and the latest policy announcements from the Federal Reserve and the Bank of England.

At 7:45?am GMT, the FTSE 100 was 0.6% higher at 8,335.95.

Richard Hunter, head of markets at Interactive Investor, said earnings season was set to be "at full throttle" in the UK this week.

Updates from BP and Shell will be among the highlights, apart from releases from the likes of Diageo, Next, International Consolidated Airlines and Rolls-Royce, he said.

For the banks, HSBC, Standard Chartered and Barclays will round off the season, hoping to repeat the strong lead given so far from Lloyds Banking and NatWest, where creditable half-year performances were bolstered by a strong second quarter, he said.

There will also be some focus on the BoE, which will reveal its latest interest rate decision on Thursday. At present, the consensus is evenly split between a cut and a no-change decision, with the latest economic data having seemingly been unable to provide a definitive steer. A cut at some point this year is nonetheless expected, although the timing remains on the flip of a coin, he added.

Looking ahead to the rest of the day, net lending, consumer credit and mortgage approvals figures for June are all due at 8:30?am GMT.

Investors were also eyeing a statement to Parliament on Monday afternoon by Chancellor Rachel Reeves, who is expected to reveal cuts to plug a £20 billion black hole in public finances.

In equity markets, consumer goods firm Reckitt Benckiser dipped amid potential litigation concerns, after a US jury found on Friday that formula by Abbott Laboratories had caused a girl to develop bowel disease. Abbott was ordered to pay $495 million in damages.

Jefferies said in a research note: This is likely to depress sentiment on the risk for both cited defendants (Reckitt and Abbott) in these claims, we think.

RKT share price we estimate is already discounting for around £3/$3.5 billion of liability risk next year. But with its own new individual trial due to start on 30 Sept & MDL class action gaining momentum, that risk may be extended this week we think, it said.

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