London stocks rose at the open on Wednesday after a four-day holiday weekend, as prices caught up to gains by European markets on Tuesday following the removal of more Covid restrictions in China.
The FTSE 100 index opened up 68.51 points, or 0.9%, at 7,541.52. The FTSE 250 was up 54.52 points, or 0.3%, at 18,884.60, and the AIM All-Share was up 0.32 of a point at 832.28.
The Cboe UK 100 was up 0.9% at 754.17, the Cboe UK 250 up 0.2% at 16,336.01, and the Cboe Small Companies up 0.8% at 13,190.69.
Travel disruption is expected across railways in the UK again on Wednesday, with many commuters returning to work following the Christmas break, as industrial action by rail workers continues.
Members of the Transport Salaried Staffs’ Association at Great Western Railway will walk out from noon to 11.59am on Thursday, and at West Midlands Trains for 24 hours from noon until the same time on Thursday.
It comes after a day of travel chaos despite a rail strike by the Rail, Maritime and Transport Workers’ Union coming to an end, with crowds of people left waiting at major train stations across London and many journeys delayed due to the late handover of engineering works.
In London, Fresnillo rose 0.9% as it celebrated full load commissioning of a power plant at its Juanicipio project in Mexico, after final testing was completed.
The miner confirmed the completion of downstream power distribution and control systems checks at the Juanicipio asset, concluding additional testing requested by the state-owned power company Comision Federal de Electricidad.
The entire system has now been energised, and commissioning of the project has formally begun. Fresnillo said the ramp up now will be conducted at pace, with the aim of reaching full nameplate capacity in the second quarter of 2023.
In the FTSE 250, IMI completed its acquisition of smart thermostatic control manufacturer Heatmiser UK. Shares in IMI were up 0.3%.
The acquisition was first announced at the beginning of November for an enterprise value of £110 million. IMI added at the time that a further £8 million could be paid based on Heatmiser’s future financial performance.
Elsewhere in London, James Fisher climbed 2.3%, after it announced it has agreed to sell its Subtech Swordfish dive support vessel for $24 million.
The marine services provider explained that the sales agreement allows James Fisher to maintain access to the vessel until the end of the third quarter of 2023, allowing it to complete existing and potential customer commitments.
On AIM, Polarean Imaging surged 43% as it announced the US Food & Drug Administration has granted approval to Xenoview, its drug device combination production, for use with MRI for the evaluation of lung ventilation in adults and children aged 12 and older.
Polarean Chief Executive Richard Hullihen said: ‘Approval of Xenoview represents a major step forward in modern respiratory imaging and we are proud to have pioneered this exciting new technology for clinical use. The commercial team at Polarean is prepared to rapidly launch Xenoview for clinical application.’
In European equities on Wednesday, the CAC 40 in Paris was up 0.2%, while the DAX 40 in Frankfurt was flat, having added 0.7% and 0.4%, respectively, on Tuesday.
In the US on Tuesday, Wall Street ended mixed, with the Dow Jones Industrial Average ending up 0.1%, the S&P 500 down 0.4% and the Nasdaq Composite down 1.4%.
The monster storm that killed dozens in the US over the Christmas weekend continued to inflict misery on New York state and air travellers nationwide Tuesday, as stories emerged of families trapped for days during the ’blizzard of the century’.
The number of deaths attributed to the winter storm - most of them in road accidents - rose to at least 50 after officials confirmed another fatality in western New York’s Erie County, the epicentre of the crisis.
In Asia on Wednesday, the Japanese Nikkei 225 index ended down 0.4%. In China, the Shanghai Composite closed down 0.3%, while the Hang Seng index in Hong Kong finished 1.6% higher. The S&P/ASX 200 in Sydney closed down 0.3%.
China says it will resume issuing ordinary visas and passports in another big step away from anti-virus controls that isolated the country for almost three years, setting up a potential flood of millions of Chinese going abroad for next month’s Lunar New Year holiday.
The announcement adds to abrupt changes that are rolling back some of the world’s strictest anti-virus controls as President Xi Jinping’s government tries to reverse an economic slump.
The US is considering Covid entry restrictions for travellers from China, US officials said Tuesday, after Beijing dramatically loosened hardline containment measures this month.
Infections have surged across China as key pillars of its containment policy have been dismantled, prompting US officials to express concern at the potential for new variants to be unleashed.
The pound was quoted at $1.2044 at early on Wednesday in London, higher compared to $1.2027 at the close on Friday.
The euro stood at $1.0642, flat against $1.0641. Against the yen, the dollar was trading at JP¥133.93, higher compared to JP¥133.54.
Brent oil was quoted at $84.24 a barrel at early in London on Wednesday, down from $84.89 late Friday. Gold was quoted at $1,806.66 an ounce, sharply lower against $1,812.04.
‘If the Chinese reopening story is positive for oil and commodity prices - and for the massively battered Chinese stocks, it‘??s bad news for global inflation,’ commented Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
‘This is why we don’??t see the US stocks gain on China reopening news, but we rather see them under a decent pressure, as the surge in Chinese demand will certainly boost inflation through higher energy and commodity prices. And in response to higher inflation, the central banks will continue hiking rates.’
Russia issued a decree Tuesday to ban oil sales to countries and companies that comply with a price cap agreed by Western countries in response to Moscow’s offensive in Ukraine.
‘The supply of Russian oil and oil products to foreign legal entities and individuals is prohibited if the contracts for these supplies directly or indirectly’ are using a price cap, the presidential decree said.
The decree will be in effect from February 1 until July 1.
Still to come on Wednesday’s economic calendar, there is the US pending homes sales index at 1500 GMT.
By Heather Rydings, Alliance News senior economics reporter
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