London open: Upbeat earnings lift markets higher ahead of US data

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LONDON (ShareCast) - Upbeat corporate earnings from a number of heavyweight stocks helped UK markets higher on Tuesday morning as investors showed optimism ahead of some key economic data out later on.

The FTSE 100 was trading up 0.1% at 6,659.87 early on, building on gains after hitting a two-and-a-half-month high on Monday of 6,654.2.

A backlog of US data should begin to unwind this week following the end of the government shutdown with last month's employment report likely to garner the most attention today. However, the figures will have less clout than normal given that they are already over two weeks old.

Nevertheless, consensus forecasts are pointing to an 180,000 increase in US non-farm payrolls last month, higher than the 169,000 gain seen in August. Meanwhile, the unemployment rate is expected to have remained unchanged at 7.3%.

Chief Economist Simon Smith from FxPro explained that the survey was undertaken before the shutdown took effect, so markets will likely be wary of "the extent to which subsequent developments have undermined any strength in the economy".

Investors are hoping that the shutdown - which is likely to have dampened US growth in the fourth quarter - will prompt the Federal Reserve to delay tapering its stimulus programme until next year.

Fed Bank of Chicago President Charles Evans said yesterday that the central bank may not taper for "a few months" given due to the cloudy economic outlook. Evans said that he wants to see "consistent" growth in non-farm payrolls of over 200,000 each month and a lower jobless rate before the Fed can make a move.

Blue chips impress early on

Household products group Reckitt Benckiser (Xetra: A0M1W6 - news) was a high riser after lifting its full-year revenue guidance slightly following a strong third quarter and a decent performance by recent acquisitions. The company said it now expects to grow net revenue excluding Reckitt Benckiser Pharmaceuticals (RBP) by "at least 6%" in 2013, compared with the previous forecast of the "upper end of the +5-6% range".

BHP Billiton (NYSE: BBL - news) was also in demand after the world's largest miner raised its forecast for annual iron ore production whilst maintaining guidance for oil, copper and coal output.

Engineering (Milan: ENG.MI - news) firm GKN (LSE: GKN.L - news) advanced after a 16% increase in group sales to £1.87bn and a 34% jump in profits in the third quarter, helped by a good performance from its auto and commercial aerospace divisions.

Bucking the trend was ARM Holdings (LSE: ARM.L - news) as the chip designer fell after unveiling its third-quarter results. Investors gave a cool reaction to the figures despite a strong 36% jump in pre-tax profits to £92.6m.

Utilities providers SSE (LSE: SSE.L - news) and National Grid (LSE: NG.L - news) were lower as ongoing hikes in energy tariffs across the sector come under increased scrutiny from politicians.

Property group Grainger (LSE: GRI.L - news) was a high riser on the FTSE 250 after JPMorgan Cazenove raised its rating on the stock from 'neutral' to 'overweight', saying that UK house price inflation is not yet priced into the shares.

The same bank lifted its target price for insurance giant RSA from 132p to 141p, giving the stock a lift this morning, saying that its UK underwriting results are expected to "turn the corner".


FTSE 100 - Risers
Reckitt Benckiser Group (RB.) 4,719.00p +4.87%
BHP Billiton (BLT) 1,925.50p +2.78%
GKN (GKN) 366.90p +1.21%
Carnival (CCL) 2,115.00p +0.95%
Legal & General Group (LGEN) 208.60p +0.77%
RSA Insurance Group (RSA) 123.00p +0.74%
Anglo American (LSE: AAL.L - news) (AAL) 1,547.00p +0.68%
Antofagasta (LSE: ANTO.L - news) (ANTO) 897.00p +0.67%
British American Tobacco (LSE: BATS.L - news) (BATS) 3,356.00p +0.60%
Whitbread (WTB) 3,392.00p +0.59%

FTSE 100 - Fallers
ARM Holdings (ARM) 994.50p -4.28%
Smith & Nephew (LSE: SN.L - news) (SN.) 782.50p -1.88%
SSE (SSE) 1,427.00p -1.72%
easyJet (EZJ) 1,339.00p -1.40%
International Consolidated Airlines Group SA (CDI) (IAG) 360.00p -1.21%
Persimmon (PSN) 1,239.00p -0.88%
National Grid (NG.) 759.50p -0.85%
Associated British Foods (LSE: ABF.L - news) (ABF) 2,059.00p -0.68%
TUI Travel (LSE: TT.L - news) (TT (BSE: TTL.BO - news) .) 379.60p -0.68%
Coca-Cola HBC AG (CDI) (CCH) 1,752.00p -0.68%

FTSE 250 - Risers
Grainger (GRI) 190.60p +3.59%
African Barrick Gold (LSE: ABG.L - news) (ABG) 162.70p +2.52%
Bwin.party Digital Entertainment (BPTY) 121.40p +2.27%
esure Group (ESUR) 235.70p +2.12%
Fidessa Group (FDSA) 2,018.00p +1.66%
BH Macro Ltd. EUR Shares (BHME) € 19.90 +1.53%
Carpetright (CPR) 636.50p +1.35%
BH Macro Ltd. USD Shares (BHMU) 19.63 +1.29%
Daejan Holdings (LSE: DJAN.L - news) (DJAN) 4,041.00p +1.18%
Countrywide (CWD) 594.00p +1.11%

FTSE 250 - Fallers
UBM (UBM (LSE: UBM.L - news) ) 716.00p -3.76%
IP Group (LSE: IPO.L - news) (IPO) 137.00p -2.84%
Redrow (RDW) 250.20p -2.11%
Barratt Developments (LSE: BDEV.L - news) (BDEV) 341.00p -1.73%
KCOM Group (LSE: KCOM.L - news) (KCOM) 99.00p -1.69%
Bovis Homes Group (BVS) 790.00p -1.68%
Bank of Georgia Holdings (BGEO) 1,968.00p -1.60%
Carillion (CLLN) 307.00p -1.54%
Taylor Wimpey (LSE: TW.L - news) (TW.) 111.30p -1.50%
Perform Group (PER) 550.00p -1.43%

BC

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